Income Inequality and Current Account Imbalances:
This paper studies the empirical and theoretical link between increases in income inequality and increases in current account deficits. Cross-sectional econometric evidence shows that higher top income shares, and also financial liberalization, which is a common policy response to increases in incom...
Gespeichert in:
| 1. Verfasser: | |
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| Format: | Elektronisch E-Book |
| Sprache: | English |
| Veröffentlicht: |
Washington, D.C
International Monetary Fund
2012
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| Schriftenreihe: | IMF Working Papers
Working Paper No. 12/8 |
| Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
| Zusammenfassung: | This paper studies the empirical and theoretical link between increases in income inequality and increases in current account deficits. Cross-sectional econometric evidence shows that higher top income shares, and also financial liberalization, which is a common policy response to increases in income inequality, are associated with substantially larger external deficits. To study this mechanism we develop a DSGE model that features workers whose income share declines at the expense of investors. Loans to workers from domestic and foreign investors support aggregate demand and result in current account deficits. Financial liberalization helps workers smooth consumption, but at the cost of higher household debt and larger current account deficits. In emerging markets, workers cannot borrow from investors, who instead deploy their surplus funds abroad, leading to current account surpluses instead of deficits |
| Beschreibung: | 1 Online-Ressource (44 p) |
| ISBN: | 1463930577 9781463930578 |
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| id | DE-604.BV048344069 |
| illustrated | Not Illustrated |
| index_date | 2024-07-03T20:13:18Z |
| indexdate | 2024-07-10T09:35:25Z |
| institution | BVB |
| isbn | 1463930577 9781463930578 |
| language | English |
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| oclc_num | 1337141401 |
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| series2 | IMF Working Papers |
| spelling | Ranciere, Romain Verfasser aut Income Inequality and Current Account Imbalances Ranciere, Romain Washington, D.C International Monetary Fund 2012 1 Online-Ressource (44 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 12/8 This paper studies the empirical and theoretical link between increases in income inequality and increases in current account deficits. Cross-sectional econometric evidence shows that higher top income shares, and also financial liberalization, which is a common policy response to increases in income inequality, are associated with substantially larger external deficits. To study this mechanism we develop a DSGE model that features workers whose income share declines at the expense of investors. Loans to workers from domestic and foreign investors support aggregate demand and result in current account deficits. Financial liberalization helps workers smooth consumption, but at the cost of higher household debt and larger current account deficits. In emerging markets, workers cannot borrow from investors, who instead deploy their surplus funds abroad, leading to current account surpluses instead of deficits Online-Ausg Kumhof, Michael Sonstige oth Lebarz, Claire Sonstige oth Richter, Alexander W. Sonstige oth Throckmorton, Nathaniel A. Sonstige oth http://elibrary.imf.org/view/IMF001/12526-9781463930578/12526-9781463930578/12526-9781463930578.xml Verlag URL des Erstveröffentlichers Volltext |
| spellingShingle | Ranciere, Romain Income Inequality and Current Account Imbalances |
| title | Income Inequality and Current Account Imbalances |
| title_auth | Income Inequality and Current Account Imbalances |
| title_exact_search | Income Inequality and Current Account Imbalances |
| title_exact_search_txtP | Income Inequality and Current Account Imbalances |
| title_full | Income Inequality and Current Account Imbalances Ranciere, Romain |
| title_fullStr | Income Inequality and Current Account Imbalances Ranciere, Romain |
| title_full_unstemmed | Income Inequality and Current Account Imbalances Ranciere, Romain |
| title_short | Income Inequality and Current Account Imbalances |
| title_sort | income inequality and current account imbalances |
| url | http://elibrary.imf.org/view/IMF001/12526-9781463930578/12526-9781463930578/12526-9781463930578.xml |
| work_keys_str_mv | AT ranciereromain incomeinequalityandcurrentaccountimbalances AT kumhofmichael incomeinequalityandcurrentaccountimbalances AT lebarzclaire incomeinequalityandcurrentaccountimbalances AT richteralexanderw incomeinequalityandcurrentaccountimbalances AT throckmortonnathaniela incomeinequalityandcurrentaccountimbalances |