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

Author

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  • Goda, Thomas
  • Onaran, Özlem
  • Stockhammer, Engelbert

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

  • Goda, Thomas & Onaran, Özlem & Stockhammer, Engelbert, 2014. "A case for redistribution? income inequality and wealth concentration in the recent crisis," Greenwich Papers in Political Economy 14056, University of Greenwich, Greenwich Political Economy Research Centre.
    • Handle: RePEc:gpe:wpaper:14056
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    File URL: http://gala.gre.ac.uk/id/eprint/14056/1/GPERC05_Onaran_Goda_StockhammerF.pdf
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    Cited by:

    1. Hager, Sandy Brian, 2015. "Corporate Ownership of the Public Debt: Mapping the New Aristocracy of Finance," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 13(3), pages 505-523.
    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

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    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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