Policy promoting growth and reducing inequality faces societal resistance.
The article explores how risk, growth, and inequality are connected in the economy. By combining different economic models, the researchers found that growth, inequality, and risk all increase together. However, there is a tradeoff between risk-pooling and growth when it comes to overall welfare. The study suggests that policies like subsidizing capital returns can boost growth and reduce wealth inequality. Interestingly, the majority of voters may not support full insurance against individual risks because it could lead to lower overall welfare due to slower growth.