Inequality and Household Finance During the Consumer Age

Cynamon, Barry Z.; Fazzari, Steven M.

doi:10.2139/ssrn.2205524

Cited by 41 publications

(19 citation statements)

References 48 publications

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“…Several other heterodox authors -including Foster and Magdoff (2009), Hein (2012), Palley (2012), Cynamon and Fazzari (2013) and van Treeck (2014) -have offered analyses that substantially overlap with ours. They show that prior to the crisis a structural demand gap in the US, caused by the fact that wages were increasing more slowly than productivity, was hidden by the growth of the financial sector and increasing household debt of the bottom 95 per cent.…”

Section: Income Inequality and Debt-and Export-driven Growthmentioning

confidence: 65%

Income Inequality and Wealth Concentration in the Recent Crisis

Goda¹,

Onaran²,

Stockhammer³

2016

Development and Change

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This article shows that the increase of income inequality and global wealth concentration was an important driver for the financial and Eurozone crisis. The high levels of income inequality resulted in balance of payment imbalances and growing debt levels. Rising wealth concentration contributed to the crisis because the increasing asset demand from the rich played a key role in the growth of the structured credit market and enabled poor and middle-income households to accumulate increasing amounts of debt. This analysis thereby puts both income and wealth inequality at the epicentre of the recent crisis, and as crucial for social scientists analysing the causes of the crisis. The authors' findings suggest that the policy response to the crisis should not be limited to financial regulation but must involve policies to address inequality by increasing the bargaining power of labour as well as redistributive tax policies.

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Section: Income Inequality and Debt-and Export-driven Growthmentioning

confidence: 65%

Income Inequality and Wealth Concentration in the Recent Crisis

Goda¹,

Onaran²,

Stockhammer³

2016

Development and Change

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“…() further develop this framework by introducing a consumption function with habit formation. This extension allows the authors to shed light on the empirical finding by Cynamon and Fazzari () and Perugini et al . (), among others, that the redistribution of income toward the top earners observed since the 1980s has not resulted in stagnation due to the increase in the availability of consumer credit and the consequent use of leverage to finance consumption by the poorest households.…”

Section: Sfc‐ab Models: Toward a New Benchmark?mentioning

confidence: 90%

The Agent‐based Approach to Post Keynesian Macro‐modeling

Guilmi

2017

Journal of Economic Surveys

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The paper presents a survey of Post Keynesian (PK) agent‐based (AB) models and AB models with PK features. It is argued that AB modeling is fully consistent with the PK approach and that the cross‐fertilization can benefit both areas of research. The survey focuses on how the various models have faced the issues implied by adopting a bottom–up approach in a traditionally aggregative structure and highlights the additional insights coming from this modeling strategy. Particular attention is devoted to stock‐flow consistent AB models for theivvr potential in defining a new benchmark for this type of research.

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“…It should be noted that the overall increase in the household debt level observed from the data was mainly concentrated among the households outside the top of the income distribution (Barba & Pivetti ; Cynamon & Fazzari ; Debelle ). This is illustrated in Figure .…”

Section: Introductionmentioning

confidence: 85%

Household debt, expected economic conditions, and income inequality

Berisha

Meszaros

2018

Int. J Fin Econ

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The high level of debt among households outside the top end of the income distribution has led many economists to assert that household debt has been an important component of the increase in income inequality in the United States. In addition, the yield spread provides information about the overall condition of the economy and may also be tied into the distribution of income. The paper's results show that increases in the yield spread and household debt correspond with increases in top income shares, resulting in increases in income inequality. However, as household debt and income inequality increase, the yield spread contracts, which suggests future economic contraction. Thus, rising inequality may signal future economic weakness.

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Inequality and Household Finance During the Consumer Age

Cited by 41 publications

References 48 publications

Income Inequality and Wealth Concentration in the Recent Crisis

Income Inequality and Wealth Concentration in the Recent Crisis

The Agent‐based Approach to Post Keynesian Macro‐modeling

Household debt, expected economic conditions, and income inequality

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