Grant Category

Macroeconomics and Inequality

What are the implications of inequality on the long-term stability of our economy and its growth potential?

What are the implications of inequality on the long-term stability of our economy and its growth potential?

A larger share of U.S. national income has been flowing to the individuals at the top of the income and wealth ladder. These individuals are less likely to spend and more likely to save their money than those with lower income. There is evidence that growing income inequality may be contributing to the so-called secular stagnation of macroeconomic growth.

Growing income inequality likely bears on macroeconomic performance through other channels as well. The lower real interest rates that have resulted from higher global saving will limit the ability of conventional monetary policy to stabilize the economy in the next economic downturn. Growing inequality has also contributed to a growing sense that the economy isn’t working for most families, fueling both distrust in institutions and greater political polarization.

We need to better understand the implications of inequality on the long-term stability of our economy and its growth potential. The large and sustained rise in inequality across income and wealth groups, as well as the disparate performance of different geographies and demographic groups, make understanding how these trends could exacerbate economic instability and reduce economic growth a pressing national concern.

  • The effects of monetary policy
  • The effects of fiscal policy
  • The effects of the tax and transfer system
  • Political economy

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Who Weathers the Storm? The Unequal Effects of Hurricanes in the United States

Grant Year: 2021

Grant Amount: $85,624

Grant Type: academic

Understanding the degree to which, and how, hurricanes have had disparate effects across disadvantaged and advantaged groups in the United States is key to policymakers’ ability to craft climate policy that ensures disadvantaged communities do not bear the brunt of our warming world. Most of the literature in this area has focused on average impacts, with relatively little attention paid to heterogeneity. But even in cases where no negative impacts of natural disasters are found, on average, some subgroups may experience substantial negative effects. This project leverages newly linked administrative tax data from the IRS and demographic information from the American Community Survey and decennial census with exogenous variation in individual-level exposure to all hurricanes in the United States between 1995 and 2019. The analysis seeks to uncover a deeper understanding of the consequences of and responses to hurricanes, and how these effects differ across socioeconomic and demographic groups.

Green Jobs or Lost Jobs? The Distributional Implications for US Workers in a Low Carbon Economy

Grant Year: 2021

Grant Amount: $85,000

Grant Type: academic

Confronting climate change will require the United States to dramatically reshape large portions of its economy. Carbon-intensive sectors in manufacturing and mining, which have long been bastions for middle-class jobs in communities across the country, are expected to shrink. Fears among workers and the communities that rely on these jobs are not unjustified, given recent economic research on the effect of trade shocks and environmental regulations. Yet reductions in carbon-intensive industries are only one side of the coin in addressing climate change. While many industries may shrink, a dramatic investment in green and renewable industries may create new opportunities for workers throughout the country. There is almost no economic research, however, exploring whether and how green jobs will benefit workers and their communities. Leveraging job-posting data from Burning Glass Technologies, along with the U.S. Census Bureau’s Longitudinal Employer Household Dynamics, Curtis and Marinescu will estimate the long-run benefits that workers accrue when green technology investments in solar and wind are made in their communities, as well as which types of workers benefit and which do not. The three researchers also are planning to estimate the effect of having more green jobs on local economic outcomes, such as the employment rate, poverty rate, and average incomes.

Experts

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Amy Claessens

University of Wisconsin, Madison

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Sydnee Caldwell

University of California, Berkeley

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Kevin Rinz

Washington Center for Equitable Growth

Senior Fellow and Research Advisor

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Giovanni Righi

University of California, Los Angeles

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Jon Steinsson

University of California, Berkeley

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