DESCRIPTION:

How has economic inequality changed over time? How does it differ across countries? What is economic inequality in the first place? How do inequality in income, consumption and wealth relate to each other? What is the impact of inequality on other economic factors? Should policy makers try to reduce inequality?

This seminar tries to address such questions drawing upon the recent surge in related research. Much of the debate on inequality has been phrased in terms of components of income like wages and capital income. Nonetheless, for economists, income and wealth are dimensions that become fully meaningful when studied jointly with consumption and labor decisions. In order to further our understanding of economic inequality and how it matters from a macroeconomic perspective, we will consider both empirical work (delving into several econometric approaches and data sets for different countries and time periods) and theoretical work (surveying key quantitative macroeconomic models that focus on the unequal distribution of wealth, income, and consumption across economic agents).

ORGANIZATION:

Each participant will give a 30 minutes talk on one of the topics listed below, followed by an open discussion of about 15 minutes. Each participant will also write a seminar paper, in which the discussion should be incorporated and possibly expanded.

In the second week of the semester (October 24th, 15:45), a kick-off meeting will take place during which further information is provided and topics are chosen. Seminar presentations will take place during two days in January (25th and 26th, 10:00 - 18:00). Rooms will be announced later.

The language of this seminar is English: presentations, discussions and seminar papers will have to be carried out in English.

LITERATURE and TOPICS:

TOPIC 1: The dynamics of inequality in recent decades --- U.S. and Germany

Heathcote, Jonathan, Fabrizio Perri, and Gianluca L. Violante. 2010. “Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States, 1967–2006.” Review of Economic Dynamics 13 (1): 15–51.

Nicola Fuchs-Schündeln, Dirk Krueger and Mathias Sommer. 2010. “Inequality Trends for Germany in the Last Two Decades: A Tale of Two Countries.” Review of Economic Dynamics.

TOPIC 2: The dynamics of inequality in recent decades --- China and India

Thomas Piketty, Li Yang and Gabriel Zucman. 2017. “Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015.” WID.world WORKING PAPER SERIES N° 2017/6.

Thomas Piketty and Nancy Qian. 2009. “Income Inequality and Progressive Income Taxation in China and India, 1986–2015.” American Economic Journal: Applied Economics, 1:2, 53–63.

TOPIC 3: U.S. Wealth and Income inequality dynamics since World War I

Emmanuel Saez and Gabirel Zucman. 2016. “Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data.” Quarterly Journal of Economics, 131 (2), 2016, 519-578.

Emmanuel Saez and Thomas Piketty. 2003. “Income Inequality in the United States, 1913-1998.” Quarterly Journal of Economics, 118 (1), 2003, 1-39 (Longer updated version published in A.B. Atkinson and T. Piketty eds., Oxford University Press, 2007). 

TOPIC 4: The History of Top Incomes

Emmanuel Saez, Tony Atkinson and Thomas Piketty. 2011. “Top Incomes in the Long Run of History.” Journal of Economic Literature, 49 (1), 2011, 3-71. 

TOPIC 5: Quantitative Macroeconomic Models of Inequality

Quadrini Vincenzo and Victor Rios-Rull. 2014. “Inequality in Macroeconomics.” Handbook of Income Distribution, Volume 2B.

TOPIC 6: Income and consumption inequality

Krueger Dirk and Fabrizio Perri. 2006. “Does Income Inequality Lead to Consumption Inequality? Evidence and Theory.” Review of Economic Studies 73(1): 163–93.

Aguiar Mark and Mark Bils. 2015. “Has Consumption Inequality Mirrored Income Ineqaulity?” America Economic Review, Vol. 105.

TOPIC 7: Income dynamics over the business cycle

Fatih Guvenen, Serdar Ozkan and Jae Song. 2014. “The Nature of Countercyclical Income Risk.” Journal of Political Economy.

TOPIC 8: Inequality and Crises

Kumhof Michael, Romain Ranciere and Pablo Winant. 2015. “Inequality, Leverage and Crises.” American Economic Review.

Christopher D. Carroll. 1998. “Why Do the Rich Save So Much?” NBER Working Paper No. 6549.