Why the world’s economy is unequal

Banks spend considerable time working on issues of economic inequality. This issue is the centerpiece of many, if not most, banks’ community investment efforts, not least because the more locals can be catapulted into a better financial position, the more high-dollar accounts the bank is likely to get. 

Policymakers and legislators, too, are constantly on the lookout for better ways to help address the entrenched disparities that exist throughout society. Part of this is for electoral-math reasons — let’s help people and they’ll vote for us — but mostly it’s a moral imperative.

There is no excuse for people to be desperately poor or hungry in the world’s richest country. The question of how countries sorted themselves into the GDP ranking that exists today is a vital one. Why do certain former European colonies now dominate the world economy, while others with the same heritage struggle? What explains the differences between neighboring…

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