The economics of inequality

Introduction

Dr. Matthias Schnetzer

October 14, 2022

Course info


Who are you?

What do you already know about inequality and what do you expect of this course?

Schedule

Date Time Content Assignment Room
Oct 14, 2022 10:00-12:00 Overview and administration TC.3.10
Oct 21, 2022 10:00-12:00 Data sources and definitions TC.3.10
Nov 04, 2022 10:00-12:00 Evolution of inequality TC.3.10
Nov 11, 2022 10:00-12:00 Recent research on wealth inequality TC.3.10
Nov 18, 2022 10:00-12:00 Intergenerational mobility TC.3.10
Dec 02, 2022 10:30-12:30 Welfare state redistribution D5.1.002
Dec 09, 2022 10:00-12:00 Post-Keynesian models of inequality and growth TC.3.10
Dec 16, 2022 10:00-12:00 Fiscal policy, growth, and inequality TC.4.04
Dec 23, 2022 10:00-12:00 Inequality, power and policy conclusions TC.3.10
Jan 13, 2023 10:00-12:00 Poster-Session I TC.3.10
Jan 20, 2023 10:00-12:00 Poster-Session II D5.1.002

Assignments

While assignments 1 (Piketty/Zucman, 2014) and 3 (Stockhammer/Onaran, 2013) are mandatory, students may choose between 2 (Milanovic, 2015) and 4 (Atkinson, 2014). Please write a summary of the provided paper with a limit of 400 words and upload it on the learning platform.

The submission deadline is 9 a.m. on the day of the respective teaching unit. You can structure your text around the following questions:

  • What is the research question?
  • Why is this question interesting?
  • How does the author approach and answer this question?
  • What are the main findings?
  • Is the paper credible? Why? Why not?

Essays & Posters

Research Proposal

  • Introduction
  • Literature review
  • Research question and hypotheses
  • Methodology
  • Data
  • Conclusion
  • Bibliography

Deadline: January 31, 2023

Poster

  • Title
  • Author
  • Brief literature review
  • Highlights of your research proposal research gap, research question, data, method
  • Conclusion What do you expect? Why is your research policy-relevant?
  • References

Deadline: Date of the poster session

Poster Session I

# Topic Starting literature Session
1 Historical evolution of inequality Alvaredo et al. (2013); Milanovic et al. (2011) 1
2 Developments in global inequality Kanbur (2019); Bourguignon (2018); Milanovic (2013) 1
3 Distributional National Accounts (DINA) Garbinti et al. (2018); Piketty et al. (2017) 1
4 Gender pay gaps Christofides et al. (2013); Redmond/Mcguinness (2018) 1
5 The distribution of wealth Pfeffer/Waitkus (2021); Zucman (2019); Fessler/Schürz (2018) 1
6 The missing top in wealth data Bach et al. (2019); Vermeulen (2018); Eckerstorfer et al. (2016) 1
7 Inheritances and wealth inequality Alvaredo et al. (2017); Adermon et al. (2018) 1
8 Intergenerational mobility Chetty et al. (2022); Chetty/Hendren (2018); Corak (2013) 1

Poster Session II

# Topic Starting literature Session
9 Functional distribution and growth Stockhammer/Stehrer (2011); Stockhammer (2017) 2
10 Restrictive fiscal policy and inequality Hope/Limberg (2022); Alpino et al. (2022); Savage et al. (2018) 2
11 Taxation and tax evasion Tørsløv et al. (2022); Diamond/Saez (2011); Alstadsæter et al. (2019) 2
12 Inequality and political elites López et al. (2022); Bonica et al. (2013); Gilens/Page (2014) 2
13 Inequality and preferences for redistribution Ahrens (2022); Alesina et al. (2018); Kuziemko et al. (2015) 2
14 Power in economics Stansbury/Summers (2020); Dutt (2015); Rothschild (2002) 2

Grading


Assignments: 30% (0-10 points for each homework)

Poster presentation: 30% (0-20 points for the quality of the presentation, 0-10 for the poster style and structure)

Essay/Research proposal: 40% (0-40 points for the essay)

Feedback and Evaluation

Let me know your feedback on the course anytime. If possible, I will try to incorporate your feedback immediately. At least, I will consider it for future courses.

Additionally, there will be an anonymous online evaluation at the end of semester. You are asked to fill in the evaluation in class in one of the two January sessions. Please take part in the online evaluation even if you cannot be present in these session.

Bibliography

PI 2159 Special Topics in Economic Policy | Winter term 2022/23

Adermon, Adrian/Lindahl, Mikael/Waldenström, Daniel (2018). Intergenerational wealth mobility and the role of inheritance: Evidence from multiple generations. The Economic Journal, 128(612), F482–F513. DOI: 10.1111/ecoj.12535
Ahrens, Leo (2022). Unfair inequality and the demand for redistribution: Why not all inequality is equal. Socio-Economic Review, 20(2), 463–487. DOI: 10.1093/ser/mwaa051
Alesina, Alberto/Stantcheva, Stefanie/Teso, Edoardo (2018). Intergenerational mobility and preferences for redistribution. American Economic Review, 108(2), 521–554. DOI: 10.1257/aer.20162015
Alpino, Matteo/Asatryan, Zareh/Blesse, Sebastian/Wehrhöfer, Nils (2022). Austerity and distributional policy. Journal of Monetary Economics. DOI: 10.1016/j.jmoneco.2022.07.006
Alstadsæter, Annette/Johannesen, Niels/Zucman, Gabriel (2019). Tax evasion and inequality. American Economic Review, 109(6), 2073–2103. DOI: 10.1257/aer.20172043
Alvaredo, Facundo/Atkinson, Anthony B./Piketty, Thomas/Saez, Emmanuel (2013). The top 1 percent in international and historical perspective. Journal of Economic Perspectives, 27(3), 3–20. DOI: 10.1257/jep.27.3.3
Alvaredo, Facundo/Garbinti, Bertrand/Piketty, Thomas (2017). On the share of inheritance in aggregate wealth: Europe and the USA, 1900-2010. Economica, 84(334), 239–260. DOI: 10.1111/ecca.12233
Atkinson, A. B. (2014). After piketty? The British Journal of Sociology, 65(4), 619–638. DOI: 10.1111/1468-4446.12105
Bach, Stefan/Thiemann, Andreas/Zucco, Aline (2019). Looking for the missing rich: Tracing the top tail of the wealth distribution. International Tax and Public Finance, 26(6), 1234–1258. DOI: 10.1007/s10797-019-09578-1
Bonica, Adam/McCarty, Nolan/Poole, Keith T./Rosenthal, Howard (2013). Why hasn’t democracy slowed rising inequality? The Journal of Economic Perspectives, 27(3), 103–123. DOI: 10.1257/jep.27.3.103
Bourguignon, Francois (2018). World changes in inequality: An overview of facts, causes, consequences, and policies. CESifo Economic Studies, 64(3), 345–370. DOI: 10.1093/cesifo/ifx028
Chetty, Raj/Hendren, Nathaniel (2018). The impacts of neighborhoods on intergenerational mobility i: Childhood exposure effects. The Quarterly Journal of Economics, 133(3), 1107–1162. DOI: 10.1093/qje/qjy007
Chetty, Raj/Jackson, Matthew O./Kuchler, Theresa/Stroebel, Johannes/Hendren, Nathaniel/Fluegge, Robert B./… Wernerfelt, Nils (2022). Social capital i: Measurement and associations with economic mobility. Nature, 608(7921), 108–121. DOI: 10.1038/s41586-022-04996-4
Christofides, Louis N./Polycarpou, Alexandros/Vrachimis, Konstantinos (2013). Gender wage gaps, “sticky floors” and “glass ceilings” in europe. Labour Economics, 21, 86–102. DOI: 10.1016/j.labeco.2013.01.003
Corak, Miles (2013). Income inequality, equality of opportunity, and intergenerational mobility. Journal of Economic Perspectives, 27(3), 79–102. DOI: 10.1257/jep.27.3.79
Diamond, Peter/Saez, Emmanuel (2011). The case for a progressive tax: From basic research to policy recommendation. Journal of Economic Perspectives, 25(4), 165–190. DOI: 10.1257/jep.25.4.165
Dutt, Amitava Krishna (2015). Uncertainty, power, institutions, and crisis: Implications for economic analysis and the future of capitalism. Review of Keynesian Economics, 3(1), 9–28. DOI: 10.4337/roke.2015.01.02
Eckerstorfer, Paul/Halak, Johannes/Kapeller, Jakob/Schütz, Bernhard/Springholz, Florian/Wildauer, Rafael (2016). Correcting for the missing rich: An application to wealth survey data. Review of Income and Wealth, 62(4), 605–627. DOI: 10.1111/roiw.12188
Fessler, Pirmin/Schürz, Martin (2018). Private wealth across european countries: The role of income, inheritance and the welfare state. Journal of Human Development and Capabilities, 19(4), 521–549. DOI: 10.1080/19452829.2018.1507422
Garbinti, Bertrand/Goupille-Lebret, Jonathan/Piketty, Thomas (2018). Income inequality in france, 1900–2014: Evidence from distributional national accounts (DINA). Journal of Public Economics, 162, 63–77. DOI: 10.1016/j.jpubeco.2018.01.012
Gilens, Martin/Page, Benjamin I. (2014). Testing theories of american politics: Elites, interest groups, and average citizens. Perspectives on Politics, 12(3), 564–581. DOI: 10.1017/S1537592714001595
Hope, David/Limberg, Julian (2022). The economic consequences of major tax cuts for the rich. Socio-Economic Review, 20(2), 539–559. DOI: 10.1093/ser/mwab061
Kanbur, Ravi (2019). Inequality in a global perspective. Oxford Review of Economic Policy, 35(3), 431–444. DOI: 10.1093/oxrep/grz010
Kuziemko, Ilyana/Norton, Michael I./Saez, Emmanuel/Stantcheva, Stefanie (2015). How elastic are preferences for redistribution? Evidence from randomized survey experiments. American Economic Review, 105(4), 1478–1508. DOI: 10.1257/aer.20130360
López, Matias/Silva, Graziella Moraes/Teeger, Chana/Marques, Pedro (2022). Economic and cultural determinants of elite attitudes toward redistribution. Socio-Economic Review, 20(2), 489–514. DOI: 10.1093/ser/mwaa015
Milanovic, Branko (2013). Global income inequality in numbers: In history and now. Global Policy, 4(2), 198–208. DOI: 10.1111/1758-5899.12032
Milanovic, Branko (2015). Global inequality of opportunity: How much of our income is determined by where we live? Review of Economics and Statistics, 97(2), 452–460. DOI: 10.1162/rest_a_00432
Milanovic, Branko/Lindert, Peter H./Williamson, Jeffrey G. (2011). Pre-industrial inequality. The Economic Journal, 121(551), 255–272. DOI: 10.1111/j.1468-0297.2010.02403.x
Pfeffer, Fabian T./Waitkus, Nora (2021). The wealth inequality of nations. American Sociological Review, 86(4), 567–602. DOI: 10.1177/00031224211027800
Piketty, Thomas/Saez, Emmanuel/Zucman, Gabriel (2017). Distributional national accounts: Methods and estimates for the united states. The Quarterly Journal of Economics, 133(2), 553–609. DOI: 10.1093/qje/qjx043
Piketty, Thomas/Zucman, Gabriel (2014). Capital is back: Wealth-income ratios in rich countries 1700–2010. The Quarterly Journal of Economics, 129(3), 1255–1310. DOI: 10.1093/qje/qju018
Redmond, Paul/Mcguinness, Seamus (2018). The gender wage gap in europe: Job preferences, gender convergence and distributional effects. Oxford Bulletin of Economics and Statistics, 81(3), 564–587. DOI: 10.1111/obes.12282
Rothschild, Kurt W. (2002). The absence of power in contemporary economic theory. The Journal of Socio-Economics, 31(5), 433–442. DOI: 10.1016/S1053-5357(02)00207-X
Savage, M./Callan, T./Nolan, B./Colgan, B. (2018). The great recession, austerity and inequality: Lessons from ireland. Review of Income and Wealth, 65(2), 312–336. DOI: 10.1111/roiw.12337
Stansbury, Anna/Summers, Lawrence (2020). Declining worker power and american economic performance. Brookings Papers on Economic Activity, Spring, 1–96.
Stockhammer, Engelbert (2017). Wage-led versus profit-led demand: What have we learned? A kaleckian-minskyan view. Review of Keynesian Economics, 5(1), 25–42. DOI: 10.4337/roke.2017.01.03
Stockhammer, Engelbert/Onaran, Ozlem (2013). Wage-led growth: Theory, evidence, policy. Review of Keynesian Economics, 1(1), 61–78. DOI: https://doi.org/10.4337/roke.2017.01.03
Stockhammer, Engelbert/Stehrer, Robert (2011). Goodwin or kalecki in demand? Functional income distribution and aggregate demand in the short run. Review of Radical Political Economics, 43(4), 506–522. DOI: 10.1177/0486613411402642
Tørsløv, Thomas/Wier, Ludvig/Zucman, Gabriel (2022). The missing profits of nations. The Review of Economic Studies. DOI: 10.1093/restud/rdac049
Vermeulen, Philip (2018). How fat is the top tail of the wealth distribution? Review of Income and Wealth, 64(2), 357–387. DOI: 10.1111/roiw.12279
Zucman, Gabriel (2019). Global wealth inequality. Annual Review of Economics, 11(1), 109–138. DOI: 10.1146/annurev-economics-080218-025852