Question: Could you please help me provide a corrected version of the following attempt to explain the Gini Index below? During the first few months of
Could you please help me provide a corrected version of the following attempt to explain the Gini Index below?
During the first few months of the pandemic, there were concerns among policy makers that the COVID-19 pandemic would have the effect of worsening income inequality. A worsening of income inequality would be indicated by a decline in the value of the Gini Index.
Previous studies investigating the effect of past pandemics have shown that Gini Index has increased following pandemics or epidemics, with this change lasting for up for at least 4 to 5 years after the event.
The Gini Index is related to the Lorenz Curve. If inequality gets worse, this would be visually illustrated by the Lorenz Curve moving closer towards the 45 degree line of perfect inequality.
If the government is concerned about income inequality worsening during the pandemic, the government should scale back its transfer payments and allow automatic stabilisers to take effect.
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