policymakers demonstrate

Inequality and Welfare: Is Europe Special? 523
18
16
14
12
10
8
6
4
2
0
1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Figure 12.3 Stylized trends in the economic literature about inequality: number
of inequality articles (title or keywords) in selected economics journals:
AER, QJE, JPE, RES, Econometrica, J Pub Econ and EJ (Scopus).
Anglo-Saxon world and in fact was the idea pioneered by Dalton (1920) to
measure inequality. This idea of an ethical measure of inequality was brought
into the full view of the economics profession and beyond by Atkinson (1970)
in his seminal paper with his equally distributed equivalent income (EDE). It is
defined as the equal distribution of income which gives the same total welfare
as the actual welfare. The reduction of average income in the EDE in proportion
to the actual average income gives a measure of the waste of resources induced
by the inequality of the income distribution. 6
The second message is that departing from the identity assumption of the
well-being indicator is hazardous and should not be undertaken except in some
well identified cases such as family size, handicap, etc. Here, I fully agree with
the following quote from Saez and Zucman (2014): ‘Redistribution based on
marginal utility is socially acceptable if there are objective reasons a person has
higher needs, such as having a medical condition requiring high expenses, or a
large family with many dependents.’
12.3 Normative and Positive Issues Involving Several Sciences
Maybe the first important observation that is important to convey to a large
public is that inequality and welfare are far from being at the heart of the discipline.
Figures 12.3 and 12.4 illustrate 7 the trend in publication in comparison
with articles devoted to detection of causal phenomena. One can see that
from the late 1970s to the early 1990s it was a topic that had no particular
appeal to economists. Afterwards following the inequality increase in the US
and the UK in the 1980s and 1990s, there was a surge of economists’ interest in
this issue. In 1997, Antony Atkinson gave his presidential address to the Royal
Economic Society titled ‘Bringing Income Distribution in from the Cold’. The
inequality plateaued in both these countries at the beginning of the millennium