The Unassuming Economist

From a book chapter by Ted Schrecker and Clare Bambra:

“‘Austerity is the calling card of neoliberalism’, wrote Lancet editor Richard Horton in 2017. We describe the austerity of US welfare ‘reforms’ of the 1990s and then identify the 2007–2008 financial crisis as the window of opportunity for austerity in Europe. In the UK, we focus specifically on effects on the health effects on low-income households, local government services, and the National Health Service—all negative, sometimes disastrously so. Both in the UK and in the US, impacts fell disproportionately on the poorest and most vulnerable people and regions. Effects on poverty and its sequelae were especially severe. Predictably, health inequalities in the UK increased. We conclude with a provocative description of austerity as a large-scale human experiment, analogous to the structural adjustment programmes that were used to promote neoliberalism starting in the 1980s, and with one scholar’s description of austerity in the UK as a human rights violation.”

From a book chapter by Ted Schrecker and Clare Bambra:

“‘The inequality machine is reshaping the planet’, wrote the editor of Le Monde Diplomatique in 2013. Rising inequality of income and wealth is one of the distinguishing characteristics of the neoliberal era; we provide descriptions first on a global scale and then on the national, noting the role of labour market transformations and the financial crisis. Poverty is a manifestation of inequality with especially negative consequences for health; we examine trends in the UK and the US, and contrast them with the simultaneous increases in wealth accumulation. We then provide three more focussed case examples: spatial inequalities in health in England; incarceration in the US; and unequal distribution of risks and benefits from the activities that generate climate change. We conclude with a review of evidence that economic inequality makes life worse for almost everyone in the societies affected, not just those at its sharp end.”

From a paper by Joe Piacentini, Harley Frazis, Peter B. Meyer, Michael Schultz, and Leo Sveikauskas:

“This paper surveys economic literature largely from 2020 and 2021 on how the COVID-19 pandemic and responses to it affect U.S. income inequality. Established trends of growing inequality may continue roughly as before, involving new technologies, international trade, and the growth of “superstar” firms. Employment, earnings, and schooling were affected differently across demographic groups and occupations. The pandemic disrupted lower-paid, service sector employment most, disadvantaging women and lower income groups at least temporarily, and this may have scarring effects. Government policies implemented in response to the pandemic offset much of the effect on income. Higher-paid workers tend to gain more from continuing opportunities to telework. Less-advantaged students suffered greater educational setbacks from school closures. School and day care closures disrupted the work of many parents, particularly mothers. We conclude that the pandemic is likely to widen income inequality over the long run, because the lasting changes in work patterns, consumer demand, and production will benefit higher income groups and erode opportunities for some less advantaged groups. Telework has increased permanently. High-contact jobs and services may continue to face reduced demand and increased automation. School disruptions have been worse for lower-income students and are likely to have lingering negative effects, which may widen future inequality within more recent birth cohorts. The history of the 1918 flu shows that the effect of a pandemic on inequality in income, education, health, and wealth depends on the nature of the pandemic and on behavioral and policy responses.”

From a paper by Zheng Wang, Yufei Chen, and Wenjing Sun:

“Since the 1990s, global income and wealth inequality has increased significantly, especially in developing countries, where the imbalance in wealth distribution has become increasingly prominent. This study seeks to thoroughly investigate the effects of expansionary monetary policy on income and wealth inequality, using China as a case study and employing extensive household survey microdata for empirical analysis. The findings indicate that expansionary monetary policy has significantly enhanced overall income and wealth levels. However, when considering the extent of wealth growth, it appears that affluent households have benefited more than their low- and middle-income counterparts, thereby widening the wealth gap. In addition, the real estate market boom played an amplifying role in this process, further deepening the impact of monetary policy on wealth inequality. The findings of this paper provide an important empirical basis for understanding the complex relationship between monetary policy and socio-economic inequality, and provide practical references for policymakers to consider the fairness of income and wealth distribution when formulating relevant monetary policies.”

From paper by Mallika Saha, Kumar Debasis Dutta & Touhidur Rahman:

“The increasing influence of financialization (FIN) has been widely debated for its potential to exacerbate income inequality (INQ), particularly in nations with weaker democratic institutions. This research investigates how democracy (DEM) influences the relationship between financialization (FIN) and income inequality (INQ) by examining a panel of 118 countries spanning the period from 2004 to 2022. Utilizing advanced econometric methods, specifically System-GMM estimation, the findings reveal that the FIN–INQ relationship is nonlinear, exhibiting a U-shaped pattern: Financialization initially alleviates income inequality, but after reaching a certain threshold, it begins to intensify income disparities. Additionally, we find that DEM significantly mitigates the adverse effects of FIN on INQ. Strong democratic institutions, through mechanisms such as transparency, accountability, and the protection of labor rights, help prevent wealth concentration and promote a more equitable income distribution. These findings offer critical insights for policymakers, highlighting the need to foster democratic governance to ensure that financialization contributes to equitable economic outcomes and supports sustainable development.”