Aquí.pdf

N. Gregory Mankiw's essay "Defending the One Percent" discusses the issue of rising income inequality in the US. He presents a thought experiment where an entrepreneur's innovation disrupts a previously egalitarian society, leading to vast economic inequality. Mankiw argues that the situation is similar to what has happened in the US over the past few decades, where average incomes have grown, but the top 1% has grown much faster. He notes that the share of income earned by the top 1% rose from 7.7% in 1973 to 17.4% in 2010, and the share earned by the top 0.01% rose from 0.5% to 3.3% over the same period. Mankiw suggests that addressing inequality involves not just economics but also political philosophy, and that economists must recognize the limits of their knowledge and expertise. He argues that inequality is not necessarily inefficient, and that the claim that it shrinks the economic pie is not supported by systematic evidence. Instead, he is persuaded by the thesis that skill-biased technological change has increased the demand for skilled labor, leading to increased inequality.