Arbeitspapier
Income distribution and the Great Depression
There is a growing literature comparing the current financial crisis or Great Recession to the worst economic crisis of capitalism, the Great Depression. However, the role of rising income inequality, which has risen dramatically before both crises, is rarely discussed. In this paper we discuss the rise of top-end inequality and its effects on household consumption, saving, and debt for the 1920s by applying a non-standard theory of consumption, the relative income hypothesis, to the period of interest. We argue that income inequality is linked to the increase of household consumption and the simultaneous decline of household savings as well as rapidly increasing household debt. Thus, the rise of top-end inequality in connection with a broader institutional change, such as the deregulation of financial markets, has contributed to a build-up of financial and macroeconomic instability, in the period leading to the Great Depression.
- Sprache
-
Englisch
- Erschienen in
-
Series: IMK Working Paper ; No. 153
- Klassifikation
-
Wirtschaft
Personal Income, Wealth, and Their Distributions
Factor Income Distribution
Macroeconomics: Consumption; Saving; Wealth
Aggregate Factor Income Distribution
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: U.S.; Canada: 1913-
Economic History: Financial Markets and Institutions: U.S.; Canada: 1913-
Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: 1913-
Economic History: Manufacturing and Construction: U.S.; Canada: 1913-
- Thema
-
income distribution
relative income hypothesis
household debt
financial innovation
great depression
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Belabed, Christian A.
- Ereignis
-
Veröffentlichung
- (wer)
-
Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
- (wo)
-
Düsseldorf
- (wann)
-
2015
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Belabed, Christian A.
- Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
Entstanden
- 2015
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