 Top income shares, inequality, and business cycles: United States, 1957–2016Nikolaos Charalampidis European Economic Review, 2022, vol. 150, issue C Abstract: To study the causes and consequences of cyclical fluctuations in labor and capital income inequality through structural lenses, I develop and estimate a TANK model featuring business and inequality cycles. Matching the top 10% compensation and capital income shares disciplines distributional implications of the model, and reveals aggregate implications of heterogeneity. In a setup with aggregate and agent-type specific forces, cycles in income inequality and top income shares are to a large extent the outcome of aggregate forces, operating via heterogeneity in skills, labor market institutions, and investment opportunities. Inequality influences the relative importance of aggregate forces in output cycles, links investment to labor market conditions, disaggregates labor market cycles, and amplifies the effect of shocks causing counter-cyclical inequality. Keywords: Compensation; Capital income; Inequality; Monetary policy; Heterogeneity (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:150:y:2022:i:c:s0014292122001787 DOI: 10.1016/j.euroecorev.2022.104294 Access Statistics for this article European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer More articles in European Economic Review from Elsevier |
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