Inequality & Distribution

The Institute for New Economic Thinking joined the Centre for International Governance Innovation (CIGI) in holding its fifth Annual Conference from April 10 to April 12, 2014 in Toronto.

What is “capital”? To Karl Marx, it was a social, political, and legal category—the means of control of the means of production by the dominant class. Capital could be money, it could be machines; it could be fixed and it could be variable. But the essence of capital was neither physical nor financial. It was the power that capital gave to capitalists, namely the authority to make decisions and to extract surplus from the worker.

Owing to its strong dependence on exports, Germany was among the economies hit hardest by the financial crisis.

We are not “all in it together.”

This paper analyzes equilibrium, dynamics, and optimal decisions on the factor bias of innovation in a model of induced innovation.

This research project establishes a long-run global picture of economic inequality as revealed by fiscal records and analyzes the long-run drivers of inequality as well as the distributional impact of banking crises.

This research project incorporates recent US data to update empirical analyses of regional growth and utilizes case study strategies of American regions to investigate the underlying causal mechanisms of inequality.

This research project explores the interaction between group identities and decisions to engage in collective action to secure access to public goods, such as education.

This research project designs and evaluates new strategies that can address the issues of financing human capital investments by developing and estimating a unified framework.

This research project analyzes the country-specific effects of inequality within a stock-flow consistent macro model and within a DSGE model with heterogeneous and interacting households.

We analyse the link between income distribution and the current account for the period 1972-2007. We find that rising (top-end) personal inequality leads to a decrease of the current account, ceteris paribus.

Germany’s economic policies are under attack from all sides.

In our two papers, we analyze how changes in personal and functional (wages versus profits) income distribution interact to produce different macroeconomic outcomes in different countries. On the basis of a stock-flow consistent model calibrated for the United States, Germany, and China, simulations suggest that a substantial part of the increase in household debt and the decrease in the current account in the United States since the early 1980s can be explained by the interplay of rising (top-end) household income inequality and certain institutions (e.g. easy access to credit, privately financed education and health care systems).

We develop a three-country, stock-flow consistent macroeconomic model to study the effects of changes in both personal and functional income distribution on national current account balances.