Last fall, I submitted a research proposal to the Social Sciences and Humanities Research Council. It's title was - and still is, I guess - "Inequality, social mobility and growth". Here is the non-technical part that SSHRC makes public:
In most analytical frameworks of the macroeconomy, the welfare effects of economic growth are unambiguously positive: increased output is associated with higher incomes and standards of living. But there has been much recent evidence that suggests that although real average incomes have increased substantially over the past few decades, real median incomes have not grown as quickly, and there are extended periods of time where median incomes have declined.
This divergence between the evolution of average and median incomes is generally ascribed to increasing dispersion in incomes across households, and there is in fact an extensive empirical literature that documents the rise in inequality over the past couple of generations.
The aim of this project is to explore the issues of inequality and social mobility in the context of a dynamic general equilibrium model. In addition, it will try to develop insight for the implications of these issues for such questions as economic growth and optimal tax and redistribution policies.
One of the central themes of the project will involve education. One of the more persistent features of the data is that income inequality is related to differences in levels of education, and that individuals’ education levels are highly correlated with those of their parents.
This isn't the first time I've received SSHRC funding. In point of fact, this is the fourth time in a row that I've been successful; I really am pretty good at my day job. But it is the first time I've written a proposal that wasn't based on technical points upon which I'd already spent a certain amount of time and where my expertise was well-established.
The reason why I wrote the proposal is that after more than five years on babble, these issues have pushed themselves to the forefront of my research agenda, and I've decided to go with it.
So I'd like to thank babble for forcing me to organise my thoughts and to redirect my energies on the sorts of issues that made me want to be an economist in the first place.