The arguments that the alarming level of Gini coefficient is 0.4 are widely reported. However, to the authors' knowledge, it is not based upon any rigid economic theories. In this paper, they show that Rawls' fairness is compatible with the standard model of competitive markets. This finding...

Data show that an increase in the Gini coefficient is associated with a falling bottom 𝑝𝐵% income share and an increasing top 𝑝𝑇 % income share where, for example 𝑝𝐵 = 40 and 𝑝𝑇 = 1. This relationship, which we call the 𝑋 inequality relationship, is pervasive in the...