Economics at your fingertips  

Falling Behind: Has Rising Inequality Fueled the American Debt Boom?

Moritz Drechsel-Grau and Fabian Greimel
Additional contact information
Moritz Drechsel-Grau: University of Mannheim
Fabian Greimel: University of Mannheim

No 1032, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: We investigate the prevailing view that unequal growth combined with social comparisons have driven the boom of US household debt in the decades before the Great Recession. Thereby, non-rich households try to keep up with the rising living standards of the rich. We first develop a tractable infinite-horizon consumption network model in order to illustrate the mechanism analytically. We then introduce social comparisons into a heterogeneous agents macroeconomic model with housing and heterogeneous income profiles for a quantitative analysis.

New Economics Papers: this item is included in nep-dge and nep-ure
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)

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:

Access Statistics for this paper

More papers in 2018 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

Page updated 2019-01-31
Handle: RePEc:red:sed018:1032