Federal legislation passed in the late 1980s greatly expanded the Medicaid program to include children in families with incomes at and above the poverty threshold, regardless of family structure. Using March Current Population Survey data, the author evaluates how the expansions affected private...

We quantify the connection between inequality and business cycles in a medium-scale New Keynesian model with tractable household heterogeneity, estimated with aggregate and cross-sectional data. We find that inequality substantially amplifies cyclical fluctuations. The primary source of this...