Income Inequality and Current Account Imbalances is popular PDF and ePub book, written by Mr.Michael Kumhof in 2012-01-01, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Income Inequality and Current Account Imbalances can be Read Online from any device for your convenience.
Income Inequality and Current Account Imbalances Book PDF Summary
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.
Detail Book of Income Inequality and Current Account Imbalances PDF
- Author : Mr.Michael Kumhof
- Release : 01 January 2012
- Publisher : International Monetary Fund
- ISBN : 9781463936396
- Genre : Business & Economics
- Total Page : 44 pages
- Language : English
- PDF File Size : 16,7 Mb
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