Economic disparities are the differences in income, wealth, and living standards among different groups of people, such as regions, countries, or social classes. These disparities can have negative effects on human development, social cohesion, and environmental sustainability. Therefore, identifying and addressing them is crucial for promoting economic growth and development. In this article, you will learn how to use some basic tools and concepts from economics to analyze economic disparities and explore some possible solutions.

Economic disparities can have various causes, such as differences in natural resources, human capital, technology, institutions, policies, and trade. For example, countries with abundant natural resources may have higher income than countries with scarce resources. However, if the resources are not managed well, they may also suffer from corruption, conflict, and environmental degradation. Similarly, countries with more educated and skilled workers may have higher productivity and innovation than countries with less human capital. However, if the education system is not accessible and equitable, it may also create social exclusion and resentment.