Search results for "Income shares"
showing 2 items of 2 documents
Financial Globalization, Fiscal Policies and the Distribution of Income
2020
This paper provides evidence that financial globalization—liberalization of the capital account—makes income distribution more uneven by raising the share of income that goes to the richest income deciles. We also offer evidence that changes in domestic fiscal policies in the aftermath of financial globalization are one channel through which these distributional effects could occur. Specifically, we show that episodes of capital account liberalization are followed by greater fiscal consolidation and reduced fiscal redistribution, both of which lead to increased inequality.
When Aiyagari meets Piketty: Growth, Inequality and Capital Shares
2021
We incorporate the division of income between capital and labor into analysis on the relationship between inequality and growth. Using historical data, we document that changes in the top 1 % income shares are positively associated with subsequent growth of per capita GDP when the capital share of income is low, whereas under high capital share, the association is negative. We show that these findings are compatible with a theoretical analysis that emphasises how changes in the distribution of income translate into the accumulation of capital and overall economic activity through the interplay between precautionary saving motives and consumption smoothing. We also investigate how accounting…