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In academic economics, inequality has received little attention in recent decades, although popular concerns about the super-rich have grown. The World Top Incomes Database provides evidence of the rise of the super-rich in many countries since 1980. Thomas Piketty has publicised the new data, predicting increases in inequality due to the return to capital exceeding the rate of economic growth and advocating policies to counter such increases by high taxes on the income and wealth of the super-rich. This article asks why inequality has been a neglected topic, assesses empirical contributions and Piketty' s model and discusses implications for evidence-based policies. [ABSTRACT FROM AUTHOR]

The article focuses on the implications of globalization for income inequality. Income inequality refers to the degree of dissimilarity of the incomes within a certain chosen unit, such as region, country or the globe. It describes how highly households' or groups' incomes deviate from average income in an income distribution. Most economists see economic growth as a prime move in decreasing poverty and equally distributing the benefits from growth as the cure for inequality. If countries are taken as the unit of analysis, the inequality literature can be split into within-country inequality, between-country equality and global inequality. Motivated by the Solow-Swan growth model and its implications for absolute convergence, researchers, for some time, looked at per capita income differences between countries to approximate world inequality. There are two methodological approaches to measuring global inequality. In the first approach, the whole world is considered like a country and income of each household is counted towards measuring world inequality. The second approach approximates world inequality by taking into account per capita gross domestic products of the countries, between-country income distributions, countries' populations and their within-country income distributions.