Tuesday, February 14, 2017

Has this happened before?

So I have discussed this before. The idea that the Great Depression bears a resemblance to the Great Recession, in that in both cases income inequality increased in the previous period, and went hand in hand with debt accumulation. I cited the Barba and Pivetti paper for the more recent event, and the work by my student Ahmad Borazan on the previous case (see also this post). Now I've been reading Matthew Drennan's book on Income Inequality, and he shows the following figure.
In the same vein, he suggests that income inequality was at the heart of the increasing private indebtedness, and at the heart of the Great Depression. Nothing particularly new. An interesting book, worth reading.

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