EconPapers    
Economics at your fingertips  
 

The Big Tradeoff averted: five avenues to promote efficiency and equality simultaneously

Ali Zeytoon-Nejad ()
Additional contact information
Ali Zeytoon-Nejad: School of Business, Wake Forest University

International Economics and Economic Policy, 2024, vol. 21, issue 4, No 9, 933-968

Abstract: Abstract Society as a whole faces a host of economic tradeoffs, many of which emerge around economic policies. An example of tradeoffs that any society faces in many economic realms is the tradeoff between economic efficiency and income equality (aka the efficiency-equality tradeoff). This tradeoff has been called “the Big Tradeoff” by the esteemed economist Arthur Okun, who also termed it “the Double Standard of a Capitalist Democracy.” Although the efficiency-equality tradeoff is more or less an inevitable tradeoff in most societal settings and economic contexts, there are still some special circumstances in which this tradeoff can be avoided. This paper identifies five such avenues and elaborates on why and how the tradeoff between these two somewhat contradictory societal goals—efficiency and equality—can be deftly averted under the mentioned circumstances. These avenues with their transformative potential can and should be used so that a capitalist society as an integrated whole can promote both efficiency and equality at the same time under these scenarios and avoid facing the Big Tradeoff in cases where it is evitable. Static and dynamic economic models are developed, solved, and applied to facilitate the articulation and exposition of the main points of each solution with formal rigor and logical coherence. Finally, policy implications are discussed.

Keywords: Efficiency; Equality; Tradeoff; Economic policy; Free market (search for similar items in EconPapers)
JEL-codes: A1 A13 D6 D61 D63 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10368-024-00623-x Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:iecepo:v:21:y:2024:i:4:d:10.1007_s10368-024-00623-x

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10368/PS2

DOI: 10.1007/s10368-024-00623-x

Access Statistics for this article

International Economics and Economic Policy is currently edited by Paul J.J. Welfens, Holger C. Wolf, Christian Pierdzioch and Christian Richter

More articles in International Economics and Economic Policy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-19
Handle: RePEc:kap:iecepo:v:21:y:2024:i:4:d:10.1007_s10368-024-00623-x