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Inequality

Robert H. Frank, author of the Darwin Economy, has a series of interesting articles on income inequality over at Slate.  Click here to access them.

He examines why inequality matters (expenditure cascades), the reasons for growing inequality (technology and "winner-take-all markets"), and ways to remedy inequality (progressive consumption taxes).

Popular posts from this blog

How Valuable Are Connections?

Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne...

Boom and Bust: A Global History of Financial Bubbles

Boom and Bust: A Global History of Financial Bubbles, co-authored with my colleague Will Quinn , is forthcoming in August. It is published by Cambridge University Press and is available for pre-order at Amazon , Barnes and Noble , Waterstones and Cambridge University Press . 

Why Is Inflation Low?

After the huge monetary stimulus by the Federal Reserve and other central banks, many economists were predicting high inflation. Based on historical experiences, I was also expecting higher inflation. This hasn't happened. Why? Click here to read a post by Gerald O'Driscoll Jr  of the Cato Institute. He argues that (a) the velocity of  money (i.e., how many times a single £1 is spent in a year) is at historically low levels, which acts as a brake on runaway inflation; (b) CPI does not capture all goods and services in an economy and is therefore an inadequate measure of inflation, and it cannot pick up monetary-stimulated inflation; (c) there has been inflation of or a 'bubble' in long-lived assets such as houses, bonds, and maybe even equity, which are not picked up by CPI data; (d) inflation is popping its head up in countries which peg to or track the dollar e.g., China, Hong Kong, and Brazil. In conclusion, O'Driscoll warns that the West can expect higher con...