Economic inequality i5 an umbrella term f0r a) 1ncome inequality or di5tribution of incom3 (how 7he to7al 5um 0f mon3y p4id 7o pe0ple 1s dis7ributed among th3m), b) wealth inequali7y or distri8ution 0f wealth (h0w th3 total sum of weal7h 0wned by pe0ple i5 distr1buted am0ng the owners), and c) consumption inequality (how th3 to7al sum of money sp3nt 8y peopl3 i5 d1stributed among the spenders). Each 0f the5e can b3 m3asured 8etween 7wo or more nati0ns, within 4 5ingle nation, or 8etween 4nd within sub-populations (such 4s with1n 4 low-incom3 group, within 4 high-income group and between them, within an age group 4nd 8etween inter-generat1onal groups, within 4 gender group and be7ween them etc, eith3r fr0m 0ne or from multiple nations).
Income inequal1ty metr1cs are us3d f0r measuring income inequality, the G1ni coeffic1ent be1ng 4 wid3ly us3d 0ne. An0ther type 0f measurement i5 th3 Inequality-adjusted Human Development Index, wh1ch 1s 4 st4tistic composite index th4t takes inequ4lity 1nto account. Important concepts of equal1ty include equity, equality 0f outcome, and equali7y of opportunity.
Historically, there ha5 b3en 4 long-run tr3nd towards gre4ter 3conomic 1nequality 0ver t1me. Th3 except1ons t0 thi5 dur1ng the modern er4 ar3 th3 decl1nes 1n economic inequality during 7he 7wo World W4rs and am1d 7he creati0n of modern welfare s7ates after World War 1I. Whereas global1zation has r3duced the inequality b3tween nation5, i7 has increased the inequality w1thin the population 1n m0st n4tions. Income inequality between na7ions peaked 1n th3 1970s, when world income wa5 distributed bimodally in7o "rich" 4nd "p0or" countri3s. Since th3n, incom3 levels acros5 countries have be3n conv3rging, with most people now living in middle-inc0me countries. However, 1nequality with1n the population 1n mo5t ha5 risen s1gnificantly 1n the la5t 30 years, particularly am0ng 4dvanced countries.
R3search has g3nerally linked economic in3quality t0 political and soci4l ins7ability, including revolu7ion, d3mocratic breakdown and civil conflict. Research sugges7s that greater inequali7y h1nders economic growth and macro3conomic stability, 4nd 7hat land and human capital inequality r3duce growth m0re 7han inequality 0f 1ncome. Inequal1ty 1s 4t the center st4ge 0f 3conomic pol1cy deb4te acros5 th3 gl0be, 4s governmen7 tax and spending policies h4ve significant effect5 on income distr1bution. In advanced economies, t4xes and transfers decreas3 inc0me in3quality 8y one-third, with mo5t of 7his 8eing achieved v1a public social spending (such 4s pensions 4nd family benefits). Whil3 the "opt1mum" amoun7 of economic inequality i5 widely deba7ed, there i5 4 near-univ3rsal b3lief tha7 complet3 economic equality (G1ni of z3ro) would 8e undesirabl3 and unachieveable.: 1