Equilibrium and Convergence in Income Distribution: The Case of 28 European Countries in the Recent, Turbulent Past (1995–2019)

2021 ◽  
Vol 8 (55) ◽  
pp. 95-125
Author(s):  
Yanling Guo ◽  
Friedrich L. Sell
Keyword(s):  
Steady State ◽  
Income Distribution ◽  
Great Recession ◽  
Personal Income ◽  
Euro Crisis ◽  
Return To Equilibrium ◽  
The Great Recession ◽  
Set Up ◽  
In The Beginning ◽  
Status Theory

Abstract The authors developed a political economy equilibrium framework for personal income distribution. In the beginning, they set up a theoretical model which was rooted in status theory. With this concept, one may explain a certain or optimal degree of inequality in society and define a steady state to which inequality can converge. By taking the aggregated Gini coefficient due to a collective decision process, deviations from the steady state due to shocks are allowed. A return to equilibrium is feasible with speed which is compatible with the collective decisionmaking process. The authors then conducted an empirical analysis of personal income distribution in 28 European nations for the period before, during and after the great recession of 2009/2010 and the Euro crisis of 2010/2015 (1995–2019). Not surprisingly, they found inequality convergence in the data. However, the speed of convergence is not the same for all countries.

scholarly journals Cost of Living Inequality During the Great Recession

2020 ◽  
Author(s):  
David Argente ◽  
Munseob Lee
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Great Recession ◽  
Shopping Behavior ◽  
Cost Of Living ◽  
The Great Recession ◽  
Income Groups ◽  
Percentage Points ◽  
Price Indexes ◽  
The Difference

Abstract We construct income-specific price indexes for the period from 2004 to 2016. We find substantial differences across income groups that arise during the Great Recession. The difference in annual inflation between the lowest quartile of the income distribution and the highest quartile was 0.22 percentage points for 2004–2007, 0.85 percentage points for 2008–2013, and 0.02 percentage points for 2014–2016. We find that product quality substitution and changes in the shopping behavior, margins mostly available to richer households, explain around 40% of the gap. Our evidence shows that not accounting for these differences in price indexes could lead to significant biases in the calculation of consumption and income inequality.

scholarly journals Inequality, Leverage, and Crises

2015 ◽  
Vol 105 (3) ◽  
pp. 1217-1245 ◽  
Author(s):  
Michael Kumhof ◽  
Romain Rancière ◽  
Pablo Winant
Keyword(s):  
Theoretical Model ◽  
Income Distribution ◽  
Great Recession ◽  
High Income ◽  
Middle Income ◽  
Income Share ◽  
The Great Recession ◽  
Income Ratio ◽  
Low And Middle Income

The paper studies how high household leverage and crises can be caused by changes in the income distribution. Empirically, the periods 1920–1929 and 1983–2008 both exhibited a large increase in the income share of high-income households, a large increase in debt leverage of low- and middle-income households, and an eventual financial and real crisis. The paper presents a theoretical model where higher leverage and crises are the endogenous result of a growing income share of high-income households. The model matches the profiles of the income distribution, the debt-to-income ratio and crisis risk for the three decades preceding the Great Recession. (JEL D14, D31, D33, E32, E44, G01, N22)

scholarly journals The Great Recession and the Social Safety Net

2013 ◽  
Vol 650 (1) ◽  
pp. 143-166 ◽  
Author(s):  
Robert A. Moffitt
Keyword(s):  
Income Distribution ◽  
Low Income ◽  
Great Recession ◽  
Poverty Line ◽  
Safety Net ◽  
Social Safety Net ◽  
Demographic Groups ◽  
The Great Recession ◽  
The Social ◽  
Per Capita

The social safety net responded in significant and favorable ways during the Great Recession. Aggregate per capita expenditures in safety net programs grew significantly, with particularly strong growth in the SNAP, EITC, UI, and Medicaid programs. The increase in transfers was widely shared across demographic groups, including families with and without children, and single-parent and two-parent families. Transfers grew as well among families with more employed members and with fewer employed members. In the low-income population, however, the increase in transfer amounts was not strongly progressive across income classes, with transfers to those just below or above the poverty line increasing slightly, compared to those at the bottom of the income distribution. This was mainly because of the EITC program, which provides greater benefits to those with higher family earnings. The expansions of SNAP and UI benefitted those at the bottom of the income distribution to a greater extent.

scholarly journals Organizations Recovered To Good Health: The Path To The Goal

2012 ◽  
Vol 11 (4) ◽  
pp. 467
Author(s):  
Narayan Krishna Prabhu
Keyword(s):  
Human Resources ◽  
Great Recession ◽  
Paradigm Shift ◽  
Industrial Relations ◽  
Good Health ◽  
The Great Recession ◽  
The Great Depression ◽  
Organizational Excellence ◽  
Statutory Body ◽  
Set Up

The backdrop of economic recovery now seems to be a reality. There are comparisons drawn between the Great Depression (1930s) and the Great Recession (2008 onward). Organizational excellence, involving a paradigm shift, is the need of the hour. Research in the captioned arena is a pointer to the mammoth task(s) ahead in terms of rehabilitation. This Great Recession has cast ugly pressures in various organizational areas be it legal, marketing and consumer behavior, human resources, and industrial relations. Many stakeholders are awakened by the harsh realities and there is a crying need to set up a statutory body to review the function of organizations.

Introduction

2018 ◽  
Author(s):  
Francesco Papadia ◽  
Tuomas Vӓlimӓki
Keyword(s):  
Central Bank ◽  
Great Recession ◽  
Central Banks ◽  
Price Stability ◽  
The Great Recession ◽  
Advanced Economies ◽  
Complex Development ◽  
Set Up ◽  
Optimal Set

Fundamental questions about the optimal set-up for central banks are examined in this book. In particular, we ask whether the model of an independent central bank devoted to price stability,1 which affirmed itself in most advanced economies at the turn of the last century, is the final resting point of a long and complex development that started centuries ago. We dissect the hypothesis that the Great Recession has prompted a reassessment and a possible revision of that model....

Does income distribution among immigrants adapt to host country?

2021 ◽  
Author(s):  
Asena Caner ◽  
Peder J. Pedersen
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Host Country ◽  
Great Recession ◽  
Natural Experiment ◽  
The Great Recession ◽  
Special Groups ◽  
Structural Differences ◽  
Over Time

We investigate trends in income inequality for five special groups (immigrants from Turkey in Denmark and Germany, natives in the two countries and in Turkey). The migration of people with similar characteristics and motivations to countries with structural differences is similar to a natural experiment. We ask whether immigrant inequality adapts over time to inequality among natives. We find, first, that immigrants are concentrated in the lower deciles of the overall income distribution. Secondly, considering native and immigrant distributions separately, in every decile an average native is significantly richer than an average immigrant. Thirdly, inequality decompositions show that during the great recession, in Denmark inequality grew faster among immigrants than among natives. In Germany, inequality rose somewhat among natives, while it remained the same among immigrants. Therefore, we do not observe a convergence in inequality. In both countries, in 2007-2013, rising inequality among natives is the most important factor behind the rise in overall inequality. For the longer period from the 1980s to 2013 we find no convergence in inequality. Finally, compared to Turks in Turkey, immigrants in both countries have higher incomes, distributed much more equally.  

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