Rethinking Inequality: The Complex Dynamics Beyond the Kuznets Curve

Sarthak Pattnaik, Maryan Rizinski, Eugene Pinsky

Abstract: Income inequality has emerged as a defining challenge of our time, particularly in advanced economies, where the gap between rich and poor has reached unprecedented levels. This study analyzes income inequality trends from 2000 to 2023 across developed countries (the United States, the United Kingdom, Germany, and France) and developing nations using World Bank Gini coefficient data. We employ comprehensive visualization techniques, Pareto distribution analysis, and ARIMA time-series forecasting models to evaluate the effectiveness of the Kuznets curve as a predictor of income inequality. Our analysis reveals significant deviations from the traditional inverse U-shaped Kuznets curve across all examined countries, with persistent volatility rather than the predicted decline in inequality. Forecasts using ARIMA and neural networks indicate continued fluctuations in inequality through 2030, with the U.S. and Germany showing upward trends while France and the UK demonstrate relative stability. These findings challenge the conventional Kuznets hypothesis and demonstrate that contemporary inequality patterns are influenced by factors beyond economic development, including technological change, globalization, and policy choices. This research contributes to the literature by providing empirical evidence that the Kuznets curve has limited predictive power in modern economies, informing policymakers about the need for targeted interventions to address persistent inequality rather than relying on economic growth alone.

External IDs:dblp:journals/data/PattnaikRP25