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Christopher Clarke
@EconChrisClarke
1. More billionaires are associated with less poverty. 2. Increasing billionaires per capita by ten fold lowers poverty by 43 percentage points. 3. Sweden has more billionaires per 10M people than the U.S. (34 vs 30) 4. Correlation is fairly strong (R-squared of 0.6 for two variable cross-section data) 4. Since the graph is only a correlation, what do you think is the cause? 🔗in🧵
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Diego Sanchez G.
@diegosanchezgu
There's probably an argument for institutions and democracy. There are very few billionaires in countries with expropriation risk. Democracy and institutions introduce investment incentives but also worker rights, education, social transfers, etc.
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Edgardo Báez
@_edbaez
Hey Prof! It’s not that billionaires help lower poverty, it’s that they live/move to places with already relatively lower poverty. The ultra-rich are no different to the rest of us. We all tend to live in places where our socioeconomic position is similar to those we live around
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Destroyer of Bad Takes (Emeritus)
@_Credible_Hulk
My personal theory is that poverty reduction is largely caused by capital investments that increase productivity. That requires both capital to be allocated and a mechanism for allocating effectively. Billionaires provide the accumulation and market prices provide the mechanism.
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