Revisiting macroeconomic activity and income distribution in the USA

John A. Bishop, Haiyong Liu, Lester A. Zeager () and Yizhen Zhao
Additional contact information
John A. Bishop: East Carolina University
Haiyong Liu: East Carolina University
Lester A. Zeager: East Carolina University
Yizhen Zhao: Northeastern University

Empirical Economics, 2020, vol. 59, issue 3, No 3, 1107-1125

Abstract: Abstract We revisit the distributional implications of macroeconomic activity in the USA by estimating the effects of the unemployment and inflation rates on the quintile Lorenz ordinates. We have access to 16 years of additional data (1995–2010) that were not available for the earlier studies, covering the deepest recession since the Great Depression. These additional data do not substantively change the results regarding the effects of unemployment and inflation on income inequality (both increase it). Adding controls for other important macroeconomic variables that have increased substantially in recent decades (public transfers, government budget deficits, and openness to trade) also has little effect on the findings regarding unemployment and inflation. Changes in budget deficits are uniformly equalizing, and public transfers increase the share of the bottom 20% across different specifications. Greater openness to international trade increases inequality in some specifications but has little effect when we also include controls for public transfers and budget deficits.

Keywords: Unemployment; Inflation; Income distribution; Lorenz curve; United States (search for similar items in EconPapers)
JEL-codes: D31 E32 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s00181-019-01729-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:59:y:2020:i:3:d:10.1007_s00181-019-01729-x

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-019-01729-x

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().