Inequality and income distribution

Income distribution is how a nation’s total economy is distributed amongst its population.

The distribution of income within a community may be represented by the Lorenz curve.

The Lorenz curve is closely associated with measures of income inequality, such as the Gini coefficient.

The Gini coefficient is a measure of the inequality of a distribution, a value of 0 expressing total equality and a value of 1 maximal inequality. It is commonly used as a measure of inequality of income or wealth.Worldwide, Gini coefficients for income range from approximately 0.23 (Sweden) to 0.70 (Namibia) although not every country has been assessed.

Davos 2011

The World Economic Forum  is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas

Their Annual Meeting in Davos-Klosters is perhaps best known to the world at large simply as "Davos".

This year the annual meeting will convene under the theme Shared Norms for the New Reality.

"We are now living in a completely digitalized world and a completely globalized world, so we have to find some new mechanisms and values to deal with this post-digitalized and post-globalized world," Klaus Schwab, WEF founder

Are people better than banks?

Social lending Web sites pair willing lenders with entrepreneurs and other cash-strapped borrowers.

The sites charge fees to broker and service the loan--around 1% from the lender and 2% to 4% from the borrower--as well as penalties for late payments (to cover the costs of chasing deadbeats).

The Internet enables a new infrastructure for participation, reducing the transaction costs of matching the wants and needs of people and giving them the opportunity to coordinate.

The opportunity of wealth - Microcredits

What are they?

Microcredits are small amounts of money loaned to poor people in developing countries that do not have the conditions for a usual credit.

These loans are given to people in extreme poverty in the compromise that they will start a small business and be able to pack back a small amount of interest rate.

What for?

The purpose of these credits is to stimulate the growth of businesses in these countries and thereby potentiating the growth of the economy. These credits are supposed to engage self-employment and therefore allow them to create an income, generate wealth and help to escape the extreme poverty.

 “Give a man a fish and he will eat for today; teach him how to fish and he’ll eat for a lifetime”

Problems?

• People say that it isn't as successful as they thought it would be
• Issuers give them out for a profit, not the greater good
• They put poor people in debt 

PPP (Purchasing Power Parity) or the Big Mac Index

The Purchasing Power Parity allows you to compare prices of goods or services in different countries taking into account exchange rates. It is usually used to compare the standard of living of different countries.

The Big Mac Index is an example of this. It compares the price of a Big Mac around the world. The price varies according to some local factors.