Revealed (or Imposed) Social Preferences for Equality and Growth

Using the Kuznets' inverted-U-shaped association as a structural constraint, we model the social tradeoff between changing inequality and changing income. Observed outcomes are thought of as attempts to find a constrained political-economic optimum. This model implies estimates of the parameters of a social welfare function. Our results suggest that the world is becoming an anti-egalitarian place. An extension of the model links this finding to religious heritage, exchange rate instability, and, surprisingly, to increased gender equality.