What does wealth inequality often lead to in an economy?

Wealth inequality often leads to social and economic disparities within an economy. When wealth is concentrated in the hands of a few, it can create a significant divide between different socio-economic groups. Those with less wealth may struggle to access essential services such as education, healthcare, and housing, which can perpetuate cycles of poverty and limit upward mobility.

Additionally, disparities in wealth can result in differing political power and influence, as wealthier individuals or groups can exert greater control over resource allocation and policy decisions. This can lead to systemic inequalities that affect not just individuals but communities and entire regions.

While consumer spending can be impacted by wealth inequality, the more direct consequence is the creation of social and economic disparities that can influence various aspects of society, including health outcomes, educational opportunities, and social cohesion. Therefore, the link between wealth inequality and social/economic disparities is a crucial dynamic to understand in the context of economic health and stability.