Efficiency and Equity in a Society-Economy Integrated Model

56 Pages Posted: 22 Sep 2021

See all articles by Marc Fleurbaey

Marc Fleurbaey

Paris School of Economics

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Dennis Snower

Global Solutions Initiative Foundation GmbH

Multiple version iconThere are 3 versions of this paper

Date Written: August 2021

Abstract

A model that only focuses on economic relations, and in which efficiency and equity are defined in terms of resource allocation may miss an important part of the picture. We propose an integrated model that embeds economic activities in a larger game of social interactions, and define comprehensive notions of efficiency and equity. Social interactions provide additional sources of inefficiencies and inequalities, including through the mere lack of coordination between the regulation mechanisms of the economic sphere and the social sphere. Remedies may require more than market solutions and redistribution of resources. In particular, social norms are likely to play an important role.

Suggested Citation

Fleurbaey, Marc and Kanbur, Ravi and Snower, Dennis, Efficiency and Equity in a Society-Economy Integrated Model (August 2021). CEPR Discussion Paper No. DP16446, Available at SSRN: https://ssrn.com/abstract=3928743

Marc Fleurbaey (Contact Author)

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Ravi Kanbur

Cornell University ( email )

301-J Warren Hall
Ithaca, NY 14853
United States
607-255-7966 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://www.kanbur.dyson.cornell.edu

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Dennis Snower

Global Solutions Initiative Foundation GmbH ( email )

Friedrichstraße 194 – 199
Berlin, 10117
Germany

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