There is evidence that a household's consumption response to transitory income does not decline, and perhaps increases, with the level of financial assets it holds. That is, middle class households with assets act as if they face liquidity constraints. This paper addresses this puzzling...

In a rare example of a national goal for income distribution besides reducing poverty (for which there is broad consensus), China’s leadership has recently committed to expanding the middle-income share—striving for a less polarized “olive-shaped” distribution. Recognizing the potential...

The consumption of households with liquid financial assets responds much more to transitory income shocks than the permanent-income hypothesis predicts. That is, middle class households with assets act as if they face liquidity constraints. This paper addresses this puzzling observation with a...

"The "developing world's middle class" is defined here as those who are not poor when judged by the median poverty line of developing countries, but are still poor by US standards. The "Western middle class" is defined as those who are not poor by US standards. Although barely 80 million people...

"The "developing world's middle class" is defined here as those who are not poor when judged by the median poverty line of developing countries, but are still poor by US standards. The "Western middle class" is defined as those who are not poor by US standards. Although barely 80 million people...

Western notions of the 'middle class' are of little obvious relevance to developing countries. Instead, the middle class is identified here as those living above the median poverty line of developing countries, even if still poor by rich-country standards. Over 1990-2005, economic growth and...

The 'developing world's middle class' is defined here as those who are not poor when judged by the median poverty line of developing countries, but are still poor by US standards. The 'Western middle class' is defined as those who are not poor by US standards. Although barely80 million people in...