1. Inequality: challenge of the century?
Olivier G. Giovannoni
Bard College
ASSA meetings, January

2. Outline Facts Questions
Top 10 charts on U.S. evidence …and recent research
Facts
Questions
Labor share
Why care?
Whole economy
Causes?
… adjusted for top incomes
Implications
Market labor incomes
Policy?
Inequality measures
Top and bottom incomes
Tcherneva-Giovannoni chart
Post-tax, post-transfers
LIS-Milanovic chart
Median incomes
Wealth and debt

3. 1. Labor share
80%
75%
60%
Source: Giovannoni (2014) based on NIPA and WTID data

4. 2. Inequality measures
Source: Giovannoni (2014) based on WTID data

5. 2. Inequality measures
Source: Giovannoni (2014) based on WTID data

6. 3. Top and bottom real incomes
$300K
$31K
Source: Giovannoni (2014) based on WTID and BLS data

7. 4. Tcherneva-Giovannoni
Source: Tcherneva (2014) extended back to 1917 and decomposed by top income

8. 4. Tcherneva-Giovannoni
Source: Tcherneva (2014) extended back to 1917 and decomposed by top income

9. 5. Real Median incomes of people
Source: Census Bureau, Historical Table P-2, CPI adjusted

10. 6. Post-tax
Source: Branko Milanovic, via Twitter, based on LIS data

11. 7. Wealth

12. 7. WealtH

13. 8. Stock market Wealth

14. 9. debt

15. 10. Household Balance sheets

16. Questions

17. Why care about inequality? Because the trends are worrisome
To understand the causes: Trade, finance, rents, technology (SBTC), policy shift, or…?
How to integrate in our models?
To analyze the implications: instability?
Policies?
Education as a cure?
Full employment?
Tax and redistribute?
Minimum wage?
(EPI estimates: $18 min wage to keep pace with productivity, +$18K /yr)

18. “Inequality and the balance sheet channel of instability”
Source: Jared Bernstein blog “on the economy”

19. Inequality: challenge of the century?
Olivier G. Giovannoni
James K. Galbraith (moderator)
Branko Milanovic
Stephen Rose
Joseph E. Stiglitz