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A case for redistribution? Income inequality and wealth concentration in the recent crisis

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  • Thomas Goda

    ()

  • Özlem Onaran

    ()

  • Engelbert Stockhammer

    ()

Abstract

Several Nobel laureates economists have called for redistributive policies. This paper shows that there is a strong case for redistributive policies because the global increase of income inequality and wealth concentration was an important driver for the financial and Eurozone crisis. The high levels of income inequality resulted in balance of payment imbalances and rising debt levels. Rising wealth concentration contributed to the crisis because the increasing asset demand from the rich played a key role in the rise of the structured credit market and enabled poor and middle-income households to accumulate increasing amounts of debt. To tame the inherent instability of the current mode of capitalism it is necessary to reduce inequality.

Suggested Citation

  • Thomas Goda & Özlem Onaran & Engelbert Stockhammer, 2014. "A case for redistribution? Income inequality and wealth concentration in the recent crisis," DOCUMENTOS DE TRABAJO CIEF 012186, UNIVERSIDAD EAFIT.
  • Handle: RePEc:col:000122:012186
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    References listed on IDEAS

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    Cited by:

    1. repec:zbw:espost:157794 is not listed on IDEAS
    2. Hager, Sandy Brian, 2015. "Public Debt as Corporate Power: Mapping the New Aristocracy of Finance," Working Papers on Capital as Power 2015/01, Capital As Power - Toward a New Cosmology of Capitalism.

    More about this item

    Keywords

    Financial crisis; Eurozone crisis; distribution; income inequality; wealth concentration; redistribution;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G01 - Financial Economics - - General - - - Financial Crises
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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