2023-09-28 14:46:10 +00:00
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abstract: 'Increasing inequality cannot be a long-run steady state i.e. a trend
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that can continue indefinitely. Because the bottom 99\% and top 1\% in
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the U.S. and Canada have had very different rates of growth of market
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income since the 1980s, consumption and savings flows have necessarily
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changed. If aggregate expenditure is to equal aggregate income, the
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added savings of the increasingly affluent must be loaned to balance
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total current expenditure but increasing indebtedness implies financial
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fragility, periodic financial crises, greater volatility of aggregate
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income and, as governments respond to mass unemployment with
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counter-cyclical fiscal policies, a compounding instability of public
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finances. In Canada and the United States, increasing economic
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instability is thus an implication of increasing inequality. Either an
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acceleration of the income growth rate of the bottom 99\%, or a decline
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in income growth of the top 1\%, could equalize income growth rates, and
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thereby stabilize market income shares and macro-economic flows.
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However, there is no evidence that purely economic forces will produce
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either outcome anytime soon in Canada or the U.S. any return to
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stability depends on political economy.
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The establishment of social transfer programs, rural out-migration,
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expansion of school enrolment, increased female employment and declining
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birth rates are large ``one-time{''''} social changes with big income
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impacts for working families. In Canada and the U.S. such trends helped
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stabilize inequality from 1940 to 1975, while in Mexico they have
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reduced inequality (albeit from a high level) in recent years. (C) 2013
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Elsevier B.V. All rights reserved.'
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affiliation: 'Osberg, L (Corresponding Author), Dalhousie Univ, 6214 Univ Ave,POB
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15000, Halifax, NS B3H 4R2, Canada.
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Dalhousie Univ, Halifax, NS B3H 4R2, Canada.'
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author: Osberg, Lars
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author-email: lars.osberg@dal.ca
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author_list:
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- family: Osberg
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given: Lars
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da: '2023-09-28'
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doi: 10.1016/j.econmod.2013.06.039
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eissn: 1873-6122
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files: []
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issn: 0264-9993
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journal: ECONOMIC MODELLING
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keywords: 'Economic inequality; Unbalanced growth; Economic instability; Financial
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fragility; Structural change'
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keywords-plus: INCOME INEQUALITY; UNITED-STATES; CANADA; EARNINGS
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language: English
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month: SEP
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number-of-cited-references: '70'
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orcid-numbers: Osberg, Lars/0000-0001-9643-9269
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pages: 918-930
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papis_id: e5664236f69a5f59327188c01f20d668
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ref: Osberg2013instabilityimplicati
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times-cited: '4'
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title: 'Instability implications of increasing inequality: Evidence from North America'
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2023-10-01 08:15:07 +00:00
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type: article
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2023-09-28 14:46:10 +00:00
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unique-id: WOS:000329532100109
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usage-count-last-180-days: '0'
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usage-count-since-2013: '21'
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volume: '35'
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web-of-science-categories: Economics
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year: '2013'
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