Macroeconomic Misery by Levels of Income in America

Martin Ravallion

No 29050, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Thirty years of distributional data are used to study the short-term impacts of popular macroeconomic indicators on real household incomes from the poorest to the richest Americans. The appropriate weights on unemployment versus inflation vary across the distribution. The unemployment rate matters at all levels, but especially so for the poorest. Inflation rates matter at middle incomes, though Okun’s famous Misery Index only performs well for the top income groups. GDP growth matters at all levels and proportionately more for the poorest, though only via the unemployment rate. Recessions are poverty-increasing, and skewness-decreasing, but with ambiguous effects on overall inequality.

JEL-codes: D31 E31 E32 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-cwa, nep-isf, nep-lam, nep-ltv and nep-mac
Note: DAE DEV EFG
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