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1) I think this very interesting piece in the Economist makes one important error. It says: “Some argued that structurally weak economic growth and the maldistribution of the spoils of economic activity were related. The rich have a higher tendency to... https://www.economist.com/briefing/2020/07/25/the-covid-19-pandemic-is-forcing-a-rethink-in-macroeconomics
2) save rather than spend, so if their share of income rises then overall saving goes up.”
Not necessarily. In the current environment the higher savings of the rich do not cause overall savings to go up. Because what drives higher savings in the rich also causes weaker...
Not necessarily. In the current environment the higher savings of the rich do not cause overall savings to go up. Because what drives higher savings in the rich also causes weaker...
3) consumption, there has been no increase in investment (in fact the investment share of GDP in the US and other advanced economies has declined), and if investment doesn’t rise, savings cannot rise either.
The article mentions the paper by Atif Mian, Ludwig Straub and Amir...
The article mentions the paper by Atif Mian, Ludwig Straub and Amir...
4) Sufi that makes this very point, but misses it: if high levels of income inequality don’t result in higher investment, higher savings among the rich have to be balanced somehow by lower savings elsewhere within the economy, and it is this balancing adjustment that is the...
5) problem. There are really only three ways to balance savings. One way is to allow lower consumption to cause an increase in unemployment, another way is to boost consumption by encouraging higher household debt, and the final way is for the... https://carnegieendowment.org/chinafinancialmarkets/69838
6) government to increase fiscal spending.
That’s the problem: high levels of income inequality force advanced economies to choose between higher unemployment, rising household debt and rising fiscal deficits. The article recognizes the problem of rising debt and it also...
That’s the problem: high levels of income inequality force advanced economies to choose between higher unemployment, rising household debt and rising fiscal deficits. The article recognizes the problem of rising debt and it also...
7) recognizes the problem of inequality, but it doesn’t seem to recognize the specific ways in which each leads to or exacerbates the other (and not for the first time in history).
