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Designer suits and macroeconomics…

Take a look at this suit.  Take a good look.  Is it worth $40K?  Some people seem to think so.  More importantly however, is that at least 30 of these Brioni Vanquish II suits have sold in the midst the worst financial crisis since the Great Depression.

So what does this fantastically priced suit have to do with macroeconomics?  As it turns out, there is an answer to that question.  Let me explain.

Today, in my macroeconomics class, we studied the Brazilian economy under presidents Cardoso and Lula.  Most of the details are not relevant to this blog post.  What is relevant; however, is Brazil’s poor economic condition and a concept that was introduced in class called the Gini coefficient; which measures income inequality.  Gini coefficient scores can range from 0 to 1; 0 being the best score and 1 being the worst score.

The latest data shows that Brazil has a Gini coefficient of 0.57 and the United States scores 0.41.  For added context, it is worth noting that both Japan and Sweden have a Gini coefficient of 0.25.  If Brazil ranks near the worst amongst United Nations members, in terms of income and/or wealth inequality, the United States is not too far behind.

The income/wealth inequality in the United States as indicated by its Gini coefficient might explain why some Americans can’t afford to heat their homes this winter while others stock up on $40K suits.  Are there macroeconomic factors at play here?  I think so.  Perhaps I will have the answer before the end of the semester.

Photo credit jcreport.com.

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Walter Pinson is the Chief Software Architect at SMBLive; whose IAmFound social marketing platform helps SMBs (small and medium-sized businesses) get discovered online and generate inbound sales leads. In his role as CSA, Walter manages a globally distributed product development group and has SaaS products deployed at major telecommunications channel partners in the US, UK, Switzerland, Canada, and Mexico. Additionally, Walter is a co-founder and principal of Pinson3 Systems; a boutique software engineering concern serving the intelligence and defense sectors with solutions ranging from enterprise web-based multi-modal biometric analysis systems to information warfare training systems. Prior to his role at SMBLive and founding Pinson3 Systems, Walter was a Senior Strategy Consultant with Microsoft focused on SaaS, SOA, and .NET adoption in the telecommunications sector. Walter has published articles for Cloud Computing Journal, is a member of ACM and IEEE, and currently has one patent pending. He holds a bachelor's degree in computer science from The Volgenau School of Information Technology and Engineering at George Mason University, where he focused on distributed and parallel computing. Walter is currently working on his MBA at the GMU School of Management.