More than five years ago (actually, six) I had wondered whether it is a coincidence that inequality in the US hit a peak in 1929 and 2007. While I did not have time to follow-up on this with an academic paper, Christian Belabed of the IMK just did. Here is his abstract:econoblog 101
Income inequality and the Great Depression II
Dirk Ehnts | Lecturer at Bard College Berlin
1 comment:
Well I don't know how well you can compare the two era's,
The farm depression and smallholder debt problem of the 20's was quite different to housing finance crisis of 2008.
The 1% got richer in the 20's from an asset bubble,...over investing in productive capacity whilst keeping wages too low. When dividends didn't materialise (because there were no buyers for the goods), their leveraged speculation blew up.
Today the inequality is more because we have a rentier problem. Regulations (or lack of) ensuring monopolies, financial institutions and IP owners cream off too much wealth. The only similarity is wages being kept too low.
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