Determinants of economic (in)equality and its implications for sustainable economic development

Abstract

Research focusing on specific key aspects of economic inequality, as well as economic equality, by analyzing numerous theoretical, methodological and empirical views concerning the mentioned socio-economic phenomena aims to identify the following related and relevant aspects that affect the efficiency of the functioning of a modern economy: a) economic inequality that has a stimulating effect on the creative, productive and innovative use of all production factors positively affects the functioning of the economy and is socially justifiable; b) high level of economic inequality which shows a tendency to further increase has a negative effect on the economic system indicators, as well as the stability of the society and the political environment, therefore resulting in weaker economic performance and lower economic growth rate; c) economic equality (certainly, not egalitarianism) by contributing to greater social and political stability, which in turn reflects positively on the economic stability and efficiency, is the basis for greater success of the modern economy and dynamic economic growth rates. The main result of this study is assessing the basic factors of high and rising economic inequality and its implications for the functioning of modern economies, and accordingly, pointing to the need to implement economic policies that would lower economic inequality and mitigate its adverse consequences for the economy and the society.

Keywords

• economic inequality
• economic equality
• sustainable economic development
• income
• standard of living
• poverty