The paper studies how high leverage and crises can arise as a result of changes in the income distribution. Empirically, the periods 1920-1929 and 1983-2008 both exhibited a large increase in the income share of the rich, a large increase in leverage for the remainder, and an eventual financial...

This is a presentation for the paper "Has the Global Financial Crisis Increased Wealth Inequality?" as delivered at the 52 Annual Conference of the Money, Macro and Finance Society" (University of Cambridge)

The paper studies how high leverage and crises can arise as a result of changes in the income distribution. Empirically, the periods 1920-1929 and 1983-2008 both exhibited a large increase in the income share of the rich, a large increase in leverage for the remainder, and an eventual financial...

The last four decades have been marked by growing inequality. The inequality of income and wealth is one of the most important macroeconomic issues of our time. Inequality contributed to Global Savings Glut and Global Financial Crisis through riskiness channel and a greater propensity to borrow...