We estimate growth rates of real incomes in the U.S. by quintiles using the Congressional Budget Office’s (CBO) post-tax, post-transfer data as basis for the period 1979-2011. We improve upon them by including only the present value of earnings that will accrue in retirement and excluding...

Since Aristotle, a vast literature has suggested that economic inequality has important political consequences. Higher inequality is thought to increase demand for government income redistribution in democracies and to discourage democratization and promote class conflict and revolution in...

We develop a micro-founded general equilibrium model with heterogeneous agents to identify pertinent constraints to financial inclusion. We evaluate quantitatively the policy impacts of relaxing each of these constraints separately, and in combination, on GDP and inequality. We focus on three...

This paper investigates the dynamics of income distribution, private debt, and aggregate demand in the United States in the era before the Great Depression. Based on a post-Keynesian model, I estimate the effects of the wage share and private debt on aggregate demand for private domestic output....

Seit Beginn der 2000er Jahre wurden die traditionellen Studienabschlüsse Diplom und Magister durch die gestuften Studienabschlüsse Bachelor und Master abgelöst. Mittlerweile ist die Umstellung weitestgehend abgeschlossen. Um die längerfristige Positionierung von Bachelorabsolventen am...

This paper examines the state of the middle classes in the U.S. and 11 countries in Western Europe and how it has changed since 1991. Among Western Europe’s six largest economies, the shares of adults living in middle-income households increased in France, the Netherlands and the United...

This paper investigates whether the individual misperception of income distributions helps explain why, opposite to Meltzer and Richard (1981), higher initial inequality levels do not correlate positively with redistribution. I conduct a representative survey experiment in Brazil, France,...

In this paper, we investigate how de facto financial globalization has influenced the labor share in developing countries. Our main argument is the need to distinguish between different types of capital in this context, as different forms of foreign investment have different fixed costs and...

When state and local governments engage in balanced budget changes in taxes and spending, what fiscal multiplier effects do such policies have on creating local jobs? Traditionally, the view has been that possible job-creation effects of such state and local "demand-side" policies are smaller,...

The impact of the expansion of the middle class in developing countries has been widely investigated in recent years. The middle class is generally apprehended by its overall demographic size, which, we believe, may hide crucial features and differences across nations because the composition of...

This paper analyzes how changing the expected length of intellectual property (IP) protection affects economic growth and the welfare of rich and poor consumers. The analysis is based on a product-variety model with non-homothetic preferences and endogenous markups in which, in accordance with...

Das Wachstum der deutschen Wirtschaft wäre seit der Wiedervereinigung kumuliert um rund zwei Prozentpunkte höher gewesen, wenn die Einkommensungleichheit konstant geblieben wäre. Darauf weisen Simulationsrechnungen mit dem DIW Makromodell hin, die unter der Annahme durchgeführt wurden, dass...

Evidence regarding the relationship between distribution, demand, and growth in the short run has been mixed. Open economy models that create the possibility of "beggar-thy-neighbor" growth offer one theoretical explanation for why this may be expected. Several authors have argued recently,...

This book is open access under a CC BY 4.0 license. This book brings together a range of ideas and theories to arrive at a deeper understanding of inequality in Latin America and its complex realities. To so, it addresses questions such as: What are the origins of inequality in Latin America?...

Although voter turnout in the 2013 general election to the German Bundestag differed considerably across income brackets, the income distribution of voters did not differ, in a statistically significant way, from that of the entire population. The non-uniform turnout, thus, is unlikely to affect...

The cumulative growth rate of the German economy since reunification would have been around two percentage points higher if income inequality had remained constant. This is whatsimulations using the DIW Macroeconomic Model have shown. They were made under the assumption that the income...

Nicht alle Regionen sind in Deutschland gleichermaßen von Einkommensarmut betroffen. Um die besonders armutsgefährdeten Gebiete zu identifizieren, ist es wichtig, regionale Preisunterschiede zu berücksichtigen. Mit dem Maßstab der so ermittelten Kaufkraftarmut bewertet, treten die größeren...

This paper provides a novel analysis of the trend in income inequality in the United States between 1979-2013. There are two ways in which this paper contributes to the literature. First, I analyze how much of the existing inequality in the U.S. is due to the demographic changes that happened...

A key aspect defining the contemporary income distribution is the (increasing) share the top holds compared to the rest. This paper shows that income concentration increases towards the very top of the distribution, while the shares the middle- and upper-middle-income groups hold remain stable...

We investigate the interaction between inequality, leverage and financial crises using bivariate Granger causality tests for a sample of 13 European countries and the United States over the period 1975-2013. We also examine the relevance of other determinants of expansions in credit to income...

In this paper, we investigate how de facto financial globalization has influenced the labor share in developing countries. Our main argument is the need to distinguish between different types of capital in this context, as different forms of foreign investment have different fixed costs and...

Although voter turnout in the 2013 general election to the German Bundestag differed considerably across income brackets, the income distribution of voters did not differ, in a statistically significant way, from that of the entire population. The non-uniform turnout, thus, is unlikely to affect...

Many advanced economies have recently embarked on fiscal austerity. As this has come at a time of high and rising income disparities, policy-makers have fretted about the inequality effects of fiscal consolidations. We shed new light on this issue by empirically investigating the (composition)...

This paper proposes a new ‘power theory’ of personal income distribution. Contrary to the standard assumption that income is proportional to productivity, I hypothesize that income is most strongly determined by social power, as indicated by one’s position within an institutional...

Das Wachstum der deutschen Wirtschaft wäre seit der Wiedervereinigung kumuliert um rund zwei Prozentpunkte höher gewesen, wenn die Einkommensungleichheit konstant geblieben wäre. Darauf weisen Simulationsrechnungen mit dem DIW Makromodell hin, die unter der Annahme durchgeführt wurden, dass...

The cumulative growth rate of the German economy since reunification would have been around two percentage points higher if income inequality had remained constant. This is whatsimulations using the DIW Macroeconomic Model have shown. They were made under the assumption that the income...

This paper studies the redistributive and revenue effects of bracket creep in Germany under various inflation scenarios and evaluates the feasibility to charge a rich tax to fight bracket creep for the income distribution in 2009. Using a tax micro-simulation model developed for the newly...

This study explores the relationship between inequality and structural transformation by constructing a theoretical model, developing analytical frameworks, and implementing a case study. The general equilibrium model we develop demonstrates that inequality exhibits an inverted U shape as...