Demand Composition and Income Distribution

Demand Composition and Income Distribution
Author: David Pothier
Publisher: International Monetary Fund
Total Pages: 50
Release: 2014-12-15
Genre: Business & Economics
ISBN: 1498300987

This paper highlights how changes in the composition of demand affect income dispersion in the short run. We first document how the share of aggregate spending dedicated to labour-intensive goods and services shrinks (expands) during downturns (booms), and argue that this contributes to the observed pro-cyclicality of employment and output in labour-intensive industries. Using a two-sector general equilibrium model, we then assess how this demand composition channel influences the cyclical properties of the income distribution. Consistent with empirical evidence, we find income inequality to be countercyclical due to changes in the level of employment and (to a lesser extent) relative factor prices. The model also shows that wealth redistribution policies can potentially involve a trade-off between equality and output, depending on how they affect the composition of aggregate demand.

Causes and Consequences of Income Inequality

Causes and Consequences of Income Inequality
Author: Ms.Era Dabla-Norris
Publisher: International Monetary Fund
Total Pages: 39
Release: 2015-06-15
Genre: Business & Economics
ISBN: 1513547437

This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.

Inequality, Leverage and Crises

Inequality, Leverage and Crises
Author: Mr.Michael Kumhof
Publisher: International Monetary Fund
Total Pages: 39
Release: 2010-11-01
Genre: Business & Economics
ISBN: 1455210757

The paper studies how high leverage and crises can arise as a result of changes in the income distribution. Empirically, the periods 1920-1929 and 1983-2008 both exhibited a large increase in the income share of the rich, a large increase in leverage for the remainder, and an eventual financial and real crisis. The paper presents a theoretical model where these features arise endogenously as a result of a shift in bargaining powers over incomes. A financial crisis can reduce leverage if it is very large and not accompanied by a real contraction. But restoration of the lower income group's bargaining power is more effective.

Wage-Led Growth

Wage-Led Growth
Author: Engelbert Stockhammer
Publisher: Springer
Total Pages: 329
Release: 2013-12-03
Genre: Business & Economics
ISBN: 1137357932

This volume seeks to go beyond the microeconomic view of wages as a cost having negative consequences on a given firm, to consider the positive macroeconomic dynamics associated with wages as a major component of aggregate demand.

Innocent Bystanders? Monetary Policy and Inequality in the U.S.

Innocent Bystanders? Monetary Policy and Inequality in the U.S.
Author: Mr.Olivier Coibion
Publisher: International Monetary Fund
Total Pages: 57
Release: 2012-08-01
Genre: Business & Economics
ISBN: 1475505493

We study the effects and historical contribution of monetary policy shocks to consumption and income inequality in the United States since 1980. Contractionary monetary policy actions systematically increase inequality in labor earnings, total income, consumption and total expenditures. Furthermore, monetary shocks can account for a significant component of the historical cyclical variation in income and consumption inequality. Using detailed micro-level data on income and consumption, we document the different channels via which monetary policy shocks affect inequality, as well as how these channels depend on the nature of the change in monetary policy.

Routledge Library Editions: Japan's International Relations

Routledge Library Editions: Japan's International Relations
Author: Various Authors
Publisher: Routledge
Total Pages: 876
Release: 2021-05-28
Genre: Social Science
ISBN: 1351372556

This set brings together a collection of key works about the International Relations of Japan. Written by a range of international experts, the titles cover the essential aspects of Japan’s postwar relationship to the outside world: its changing notion of its role in the international community, and its relations with China and the US.

U.S./Japan Foreign Trade

U.S./Japan Foreign Trade
Author: Rita E. Neri
Publisher: Routledge
Total Pages: 324
Release: 2018-02-21
Genre: Social Science
ISBN: 1351377469

This bibliography, first published in 1988, consists of annotated entries of monographs and journal articles published in English that discuss socio-economic aspects of Japanese society as well as the general and economic dynamics of United States-Japan trade relations. Emphasis is on the Japanese perspective.

Input-Output Analysis and the Structure of Income Distribution

Input-Output Analysis and the Structure of Income Distribution
Author: K. Miyazawa
Publisher: Springer Science & Business Media
Total Pages: 147
Release: 2012-12-06
Genre: Business & Economics
ISBN: 3642481469

The purpose of this study is in keeping with the shift in concern over the eco nomic problems of growth to those of income distribution in recent years. Income distribution problems may be analyzed by not only the traditional procedures, but also by some extensions of the input-output technique as I shall demonstrate in this volume of the Lecture Notes. Some fruitful results are obtained by applying the extended input-output technique to income analysis as well as to output analysis. This volume consists of three parts. These parts may be viewed along two veins, with some overlapping unavoidable: (1) Parts One and Two contain extensions of the input-output analysis and (2) Parts One and Three contain studies of the effects of the structure of income distribution on some other economic relationships. First, as an extension of the input-output analysis, we present a synthesis of the Leontief interindustry matrix multiplier and the Keynesian income multiplier in disaggregated form, and introduce a new concept which may be called the "Interrela tional Income Multiplier" as a matrix. It is designed to analyze the interrelation ships among various income-groups in the process of income formation through the medium of industrial production activity. Although this multi-sector multiplier follows from Leontief's interindustry matrix multiplier, it is formulated by the inclusion of the income generation process, which is omitted in the usual input output open model, and by projecting the multiplier process into not only the output determination side, but also into the income-determination side.