Posted on Nov 4, 2021 8:15 AMUpdated Nov 4, 2021, 8:18 AM
The explosion of inequalities in the United States is particularly obvious when we look at the evolution of the income of the American population since the 1980s. According to economists Emmanuel Saez and Gabriel Zucman (1), the less well-off 90% have saw their income stagnate, while that of the richest 1% has tripled to represent today nearly a fifth of national income.
The Nobel Prize winner Joseph Stiglitz tried to explain in 2012, through his book “The Price of Inequality”, that these extreme inequalities penalize growth. In the process, the IMF had shown empirically that the countries benefiting from a long period of growth were also those which had been able to limit income inequalities (2). But the demonstration remained fragile, no precise mechanism was identified to justify this result. Granted, there are many explanations that can come to mind, but what matters is showing that one of them actually plays. This is what economists Atif Mian, Ludwig Straub and Amir Sufi recently did.
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