Integrating Theories of Justice into Intermediate Economic Models

• Jack Doolittle, Economics, University of Delaware

• Hans Holter, Economics, University of Delaware

Issues of distributive justice are deeply underappreciated in intermediate economics courses. When mentioned, they are often addressed only in passing. This oversight is surprising, given that distributional problems over scarce resources are among the most pressing economic issues. How goods are distributed significantly affects governmental legitimacy and individuals’ ability to pursue their conceptions of the good life. Therefore, it is crucial to present these topics in a digestible manner to students at the intermediate level. This project aims to bridge this gap by considering two rudimentary models: a pure exchange economy and a pure production economy. By analyzing these simpler models, we identify complexities that arise when dealing with issues of optimal policy. The goal of this project is to remove these complexities and maintain the simplicity expected in an economic model at this level. After simplifying the rudimentary models, we integrate the appropriate changes into the classical intermediate model, which includes both production and exchange. The final model is then used to explore several key issues: the origins of inequality, the distribution of scarce resources throughout society, the relation between the considered theories, and how optimal policies shift with changes in endowments and preferences. Ultimately, this project suggests a model and analysis that will help undergraduate economics students understand issues related to theories of justice and inequality.