Inequality, the financial crisis and stagnation: Competing stories and why they matter

Arbeitspapier

This paper examines several mainstream explanations of the financial crisis and stagnation and the role they attribute to income inequality. Those explanations are contrasted with a structural Keynesian explanation. The role of income inequality differs substantially, giving rise to different policy recommendations. That highlights the critical importance of economic theory. Theory shapes the way we understand the world, thereby shaping how we respond to it. The theoretical narrative we adopt therefore implicitly shapes policy. That observation applies forcefully to the issue of income inequality, the financial crisis and stagnation, making it critical we get the story right.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IMK Working Paper ; No. 151

Classification and Topics

• Classification: Wirtschaft ; Macroeconomics and Monetary Economics: General ; Institutions and the Macroeconomy ; General Aggregative Models: General ; Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data) ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
• Subject: income inequality ; financial crisis ; stagnation ; economic theory

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Palley, Thomas I.
• Event: Veröffentlichung
• (who): Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
• (where): Düsseldorf
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/113263
• Last update: 10.03.2025, 11:41 AM CET