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- W2904093554 abstract "We introduce a macroeconomic model with heterogeneous households and an aggregate banking sector in order to analyze the impact of rising income inequality under different credit scenarios. Growing inequality produces debt‐led consumption boom dynamics when the banking sector is characterized by a lower capital requirement and a higher willingness to lend. Instead, when inequality rises but the banking sector is highly regulated, aggregate demand and output fall. Our results also yield new insights on the appropriate fiscal policy reaction to stabilize the economy: acting on the progressivity of the tax system seems more effective than a proactive countercyclical fiscal policy. ( JEL C63, D31, E62, G01)" @default.
- W2904093554 created "2018-12-22" @default.
- W2904093554 creator A5002957081 @default.
- W2904093554 creator A5068291699 @default.
- W2904093554 date "2018-12-08" @default.
- W2904093554 modified "2023-10-03" @default.
- W2904093554 title "BETWEEN SCYLLA AND CHARYBDIS: INCOME DISTRIBUTION, CONSUMER CREDIT, AND BUSINESS CYCLES" @default.
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- W2904093554 doi "https://doi.org/10.1111/ecin.12749" @default.
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