1 / 12

Inequality and Instability A Study of the World Economy Just Before the Great Crisis

Delve into the global macroeconomics of inequality, exploring factors driving economic disparities and the impact of financial regimes, led by James K. Galbraith from The University of Texas at Austin.

mwhitacre
Download Presentation

Inequality and Instability A Study of the World Economy Just Before the Great Crisis

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Inequality and InstabilityA Study of the World Economy Just Before the Great Crisis By James K. Galbraith The University of Texas at Austin For the Institute for New Economic Thinking Berlin April 14, 2012

  2. “Kepler undertook to draw a curve through the places of Mars, and his greatest service to science was in impressing on men's minds that this was the thing to be done if they wished to improve astronomy; that they were not to content themselves with inquiring whether one system of epicycles was better than another, but that they were to sit down to the figures and find out what the curve, in truth was.” -- Charles Sanders Peirce (1877)

  3. Inequality as Global Macroeconomics • At the national level, inequality is in part a curvilinear function of income level – a matter of macroeconomics. • The Kuznets Curve remains a good starting point, though with modifications for high-income countries. • Changes in inequality are driven by changing economic structure and economic geography, and changing inter-sectoral terms of trade. • Global factors dominate movements in global pay inequality. • Changing financial regimes dominate this picture.

  4. A Stylized “Augmented Kuznets Curve”

  5. This broad picture of the world economy from the standpoint of inequality measure suggests that the “super-bubble” was also, for most of the world’s population, a “super-crisis.” The super-bubble came to a peak in 2000-20001. The period since then was marked in the United States by efforts to keep the bubble going, in part through aggressive efforts to relax standards, which may be described as the growth of a “predator state.” This led to the corruption of the financial markets whose collapse produced the great crisis.

  6. “Concept 4” Inequality: The Common Movement of Inequality Measured within Countries, Across Time 9/11 Milanovic Concept 1 The Super Bubble End of Bretton Woods Profit Share in OECD Debt Crisis Note: The vertical axis represents the time element in a two-way fixed effects panel regression, across the panel of country-year observations. Vertical scale is log(T) units. Source: Kum 2008.

  7. United StatesIncome inequality and the Stock Market

  8. The US: Income Inequality and the NASDAQ, 1969-2006 Super Bubble Tax Reform Act Inequality Log of NASDAQ Income inequality measured between counties, from tax data

  9. U.S. Income Inequality Between Counties 1969 – 2005 Plotted Against the NASDAQ Composite, with Three Counterfactual Scenarios of Inequality Growth from 1994 – 2000 Without Manhattan Without Silicon Valley Without Top 15

  10. Income Inequality in the United States, 1969-2009Measured Between Counties Calculation by Amin Shams

  11. Contribution of Each County to Income Inequality, Late 2000s Contribution to inequality is presented as shading and as height above or below the zero plane. Calculation and map by Amin Shams.

  12. For more information: Oxford University Press, 2012

More Related