Rising inequality affects the composition of asset demands as well as aggregate demand. The poor have few financial assets and their portfolios are skewed towards fixed-income assets. The rich, by contrast, hold a large proportion of their wealth in stocks. Thus, an increase in inequality tends...

According to the Okishio theorem, profit-maximizing firms will not introduce new techniques which, when adopted by all firms, reduce the rate of profit. This paper presents a simple model which shows that this conclusion need not hold under imperfect competition. The model excludes working-class...

We propose an explanation for the growth of executive pay since the 1980s. New information and communication technologies (ICTs) appear to favor winner-take-all markets and to accentuate firm-level volatility of profits. We show, using an efficiency wage model, that these changes lead to higher...