TRANSFER APPROACHES TO DISTRIBUTION POLICY
Abstract
There are two ways to alter the pattern of economic inequality among persons. One is to modify the distribution of factor income by changing the underlying distribution of factors or the prices or employment of those factors. The second is to modify the process by which factor income is redistributed away from its recipients. This paper is about the second way. We ask how the distribution to factor owners is and can be modified as income moves from its market origins to its disposition on goods and services. At the outset, we sketch an accounting framework within which to envision this process whereby producer incomes are transformed into user incomes. In later sections, we review some current proposals for additional transfers to the poor.
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