What do economists agree on about inequality, and what is still disputed?

Economists agree more about what inequality is and how it has moved than about why it moved or whether it is a problem. Economic inequality is an umbrella term for three concepts: income inequality, wealth inequality and consumption inequality. Historically, there has been a long-run trend toward greater inequality, with exceptions during the two World Wars and amid the creation of welfare states after World War II. And globalization has reduced inequality between nations while increasing it within most nations.

The causes are where agreement thins. The Congressional Budget Office said the precise reasons for the rapid growth in income at the top are not well understood. Earlier steps showed why: technology, schooling, trade, taxes and institutions have each been argued to matter, and no single one has settled the question.

The effects are contested too. A 2016 meta-analysis found the effect of inequality on growth negative and more pronounced in less developed countries, yet its average impact on growth was not significant. Richard Wilkinson and Kate Pickett found more health and social problems where inequality is higher, but other research did not find these effects or concluded that the research suffered from confounding variables.

And then there is the question of values. The majority of researchers who analyze inequality argue today's levels deserve some mitigation, while some argue inequality encourages skills, risk-taking and innovation. Economics can measure the gap, but whether it is fair is a question evidence cannot settle alone.