Artikel

Income distribution, the Great Depression, and the relative income hypothesis

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This paper discusses the rise of top-end inequality and its effects on household consumption, saving, and debt in the United States during the 1920s by applying a non-standard theory of consumption, the relative income hypothesis, to the period of interest. Analysing the relevant data descriptively, the paper argues 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
Journal: European Journal of Economics and Economic Policies: Intervention (EJEEP) ; ISSN: 2052-7772 ; Volume: 15 ; Year: 2018 ; Issue: 1 ; Pages: 47-70

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)
Edward Elgar Publishing
(wo)
Cheltenham
(wann)
2018

DOI
doi:10.4337/ejeep.2017.0023
Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
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Objekttyp

  • Artikel

Beteiligte

  • Belabed, Christian A.
  • Edward Elgar Publishing

Entstanden

  • 2018

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