Historical Patterns of Inequality and Productivity around Financial Crises

Pascal Paul

No 2017-23, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: To understand the determinants of financial crises, previous research focused on developments closely related to financial markets. In contrast, this paper considers changes originating in the real economy as drivers of financial instability. To this end, I assemble a novel data set of long-run measures of income inequality, productivity, and other macrofinancial indicators for advanced economies. I find that rising top income inequality and low productivity growth are robust predictors of crises, and their slowmoving trend components largely explain these relations. Moreover, recessions that are preceded by such developments are deeper than recessions without such ex-ante trends.

JEL-codes: E24 E44 E51 G01 G20 H12 N10 N20 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2020-03-25
New Economics Papers: this item is included in nep-gro, nep-his and nep-mac
Note: The first version of this paper was published September 25, 2017.
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Historical Patterns of Inequality and Productivity around Financial Crises (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:2017-23

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DOI: 10.24148/wp2017-23

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