Macroeconomic Inequality from Reagan to Trump. Market Power, Wage Repression, Asset Price Inflation, and Industrial Decline

Abstract

This book is about the macroeconomics of inequality in the USA from the 1980s to the end of the 2010s. It is made up of six chapters, two of which (chapters 4 and 6) are co-authored by Özlem Ömer. Like most contributions by Lance Taylor and his collaborators, this research is situated at the crossroads between economic theory, economic history, applied economics and policy. The task is formidable; to assess the causes, the actual forms, and the effects of the massive distributional shift that has swept through the American economy and society in the last 40 years. The topic is of great interest. Polarization in the distribution of incomes is a major phenomenon of the recent decades. It has occurred not only in the USA but also in most of the advanced economies, producing a situation in which a small fringe of the population at the top of the income scale has benefited from an enormous increase in earnings, while a large share of the population survives on incomes bordering on subsistence, and the middle class is squeezed amid major losses in terms of income shares and the terror of ending up among the poor. The aim of the book is to address such gigantic process of redistribution toward the top by analyzing its interactions, both in terms of causes and effects, with macroeconomic magnitudes.