Income distribution and current account imbalances
Notes on capacity utilisation, distribution and accumulation
Christian Belabed (),
Thomas Theobald and
Till van Treeck
Cambridge Journal of Economics, 2018, vol. 42, issue 1, 47-94
Abstract:
We develop a three-country, stock-flow-consistent macroeconomic model to study the effects of changes in both personal and functional income distribution on national current account balances. The model is calibrated for the USA, Germany and China. Simulations suggest that a substantial part of the increase in household debt and the decrease in the current account in the USA since the early 1980s can be explained by the interplay of rising (top-end) household income inequality and institutions. On the other hand, the weak domestic demand and increasing current account balances of Germany and China since the mid-1990s are strongly related to shifts in the functional income distribution at the expense of the household sector.
Keywords: Income distribution; Current account imbalances; Relative income hypothesis; Household debt; Stock-flow consistency (search for similar items in EconPapers)
Date: 2018
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Working Paper: Income Distribution and Current Account Imbalances (2014) 
Working Paper: Income Distribution and Current Account Imbalances (2013) 
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