Author: Satya P. Das Publisher: Edward Elgar Publishing ISBN: Category : Business & Economics Languages : en Pages : 266
Book Description
This work aims to relate economic inequalities across households to fluctuations in the economy. It sets out to provide a systematic assessment of possible links between distributional changes and business cycles.
Author: Ms.Era Dabla-Norris Publisher: International Monetary Fund ISBN: 1513547437 Category : Business & Economics Languages : en Pages : 39
Book Description
This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.
Author: Jonathan Heathcote Publisher: DIANE Publishing ISBN: 1437934919 Category : Business & Economics Languages : en Pages : 61
Book Description
The authors conducted a systematic empirical study of cross-sectional inequality in the U.S., integrating data from various surveys. The authors follow the mapping suggested by the household budget constraint from individual wages to individual earnings, to household earnings, to disposable income, and, ultimately, to consumption and wealth. They document a continuous and sizable increase in wage inequality over the sample period. Changes in the distribution of hours worked sharpen the rise in earnings inequality before 1982, but mitigate its increase thereafter. Taxes and transfers compress the level of income inequality, especially at the bottom of the distribution, but have little effect on the overall trend. Charts and tables. This is a print-on-demand publication; it is not an original.
Author: Mr.Olivier Coibion Publisher: International Monetary Fund ISBN: 1475505493 Category : Business & Economics Languages : en Pages : 57
Book Description
We study the effects and historical contribution of monetary policy shocks to consumption and income inequality in the United States since 1980. Contractionary monetary policy actions systematically increase inequality in labor earnings, total income, consumption and total expenditures. Furthermore, monetary shocks can account for a significant component of the historical cyclical variation in income and consumption inequality. Using detailed micro-level data on income and consumption, we document the different channels via which monetary policy shocks affect inequality, as well as how these channels depend on the nature of the change in monetary policy.
Author: Robert Shimer Publisher: Princeton University Press ISBN: 1400835232 Category : Business & Economics Languages : en Pages : 189
Book Description
Labor Markets and Business Cycles integrates search and matching theory with the neoclassical growth model to better understand labor market outcomes. Robert Shimer shows analytically and quantitatively that rigid wages are important for explaining the volatile behavior of the unemployment rate in business cycles. The book focuses on the labor wedge that arises when the marginal rate of substitution between consumption and leisure does not equal the marginal product of labor. According to competitive models of the labor market, the labor wedge should be constant and equal to the labor income tax rate. But in U.S. data, the wedge is strongly countercyclical, making it seem as if recessions are periods when workers are dissuaded from working and firms are dissuaded from hiring because of an increase in the labor income tax rate. When job searches are time consuming and wages are flexible, search frictions--the cost of a job search--act like labor adjustment costs, further exacerbating inconsistencies between the competitive model and data. The book shows that wage rigidities can reconcile the search model with the data, providing a quantitatively more accurate depiction of labor markets, consumption, and investment dynamics. Developing detailed search and matching models, Labor Markets and Business Cycles will be the main reference for those interested in the intersection of labor market dynamics and business cycle research.
Author: Marius Clemens Publisher: ISBN: Category : Languages : en Pages :
Book Description
This paper examines the dynamics of wealth and income inequality along the business cycle and assesses how they are related to fluctuations in the functional income distribution. In a panel estimation for OECD countries between 1970 and 2016 we find that on average income inequality - measured by the Gini coefficient - is countercyclical and also shows a significant association with the capital share. Up on a closer look, we find that a remarkable share of one third of all countries display a rather pro- or acyclical relationship. In order to understand the underlying cyclical dynamics of inequality we incorporate distributive shocks, modeled as exogenous changes in the capital share, into a real business cycle model, where agents are ex-ante heterogeneous with respect to wealth and ability. We show how to derive standard inequality measures within this framework, which allow us to analyze how productivity and distributive shocks affect both, the macroeconomic variables and the personal income and wealth distribution over the business cycle. We find that whether wealth and income inequality in the model behaves countercyclical or not depends on two aspects. The intertemporal elasticity of substitution and the persistence of the shocks. We use Bayesian techniques in order to match GDP, capital share and consumption to quarterly U.S. data. The resulting parameter estimates point towards a non-monotonic relationship between productivity fluctuations and inequality. On impact, inequality increases in response to TFP shocks but declines in later periods. This pattern is consistent with the empirically observed relationship in the USA. Furthermore, we find that TFP shocks explain about 17 percent of the cyclical fluctuations in inequality in the USA.
Author: Howard J. Sherman Publisher: Routledge ISBN: 1351210882 Category : Business & Economics Languages : en Pages : 379
Book Description
There is enormous inequality between the income and wealth of the richest 1 percent and all other Americans. While the top 1 percent own 42 percent of all wealth in America, the lower half on the income ladder has only 2 percent of all of the wealth. This book develops a viewpoint contrary to the prevailing conservative paradigm, setting out both reasons for this inequality and the impact of this. To explain inequality, conservative economists focus on individual characteristics such as intelligence and hard work. This book puts forward new evidence to show that changes in economic inequality are primarily due to characteristics inherent in the standard operation of capitalist institutions. Furthermore, the authors seek to explain the cycle of boom and bust by considering political and social factors often overlooked by conservative economists. This book also explores how wealth influences political policies in a way that increases economic inequality even more than its present level. Through analysis of American political and economic institutions, Inequality, Boom, and Bust presents concrete steps for an activist, progressive policy to greatly reduce inequality through free healthcare, free higher education, and reduced unemployment.
Author: Robert J. Gordon Publisher: University of Chicago Press ISBN: 0226304590 Category : Business & Economics Languages : en Pages : 882
Book Description
In recent decades the American economy has experienced the worst peace-time inflation in its history and the highest unemployment rate since the Great Depression. These circumstances have prompted renewed interest in the concept of business cycles, which Joseph Schumpeter suggested are "like the beat of the heart, of the essence of the organism that displays them." In The American Business Cycle, some of the most prominent macroeconomics in the United States focuses on the questions, To what extent are business cycles propelled by external shocks? How have post-1946 cycles differed from earlier cycles? And, what are the major factors that contribute to business cycles? They extend their investigation in some areas as far back as 1875 to afford a deeper understanding of both economic history and the most recent economic fluctuations. Seven papers address specific aspects of economic activity: consumption, investment, inventory change, fiscal policy, monetary behavior, open economy, and the labor market. Five papers focus on aggregate economic activity. In a number of cases, the papers present findings that challenge widely accepted models and assumptions. In addition to its substantive findings, The American Business Cycle includes an appendix containing both the first published history of the NBER business-cycle dating chronology and many previously unpublished historical data series.
Author: Ms.Valerie Cerra Publisher: International Monetary Fund ISBN: 1513536990 Category : Business & Economics Languages : en Pages : 50
Book Description
Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Author: Satya P. Das
Author: Ms.Era Dabla-Norris
Author: Jonathan Heathcote
Author: Mr.Olivier Coibion
Author: Robert Shimer
Author: Marius Clemens
Author: Howard J. Sherman
Author: Robert J. Gordon
Author: Ms.Valerie Cerra
Author: Giorgio E. Primiceri