How to explain rising income and wealth inequality? We build an original heterogeneous-agent model with three key features: (i) an explicit link between firm's market power and top income shares, (ii) a granular representation of the tax and transfer system, and (iii) three assets with...

We examine the effects of government redistribution schemes in an economy where agents are subject to uninsurable, individual specific productivity risk. In particular, we consider the trade-off between positive insurance effects and negative distortions on labor supply. We parameterize the...

We study how regional shocks spill over across US local markets through intra-firm market networks and explore how such spillovers reshape household welfare across regions. We identify spillovers by linking data on barcode-region-level prices and quantities with producer-level information and by...

Does identification with dominant ethnic groups lead individuals to diverge in their preferences for redistribution? This paper contributes to the comparative analysis of the role of ethnic background in shaping attitudes towards government's role in reducing income inequalities in Indonesia,...

This paper models the interaction between individuals' identity choices and redistribution. Both redistributive polices and identity choices are endogenous, and there might be multiple equilibria. The model is applied to ethnicity and social class. In an equilibrium with high taxes, the poor...

In well-functioning democracies, the policymaking process should in principle respond to persistent economic inequality with corrective policies. This process is set in motion through majority demands for redistributive taxation and spending that elected representatives eventually supply through...

Predominant views on the political economy of Latin America and the Caribbean tend to emphasize that elite domination helps to understand the high levels of inequality. The contemporary fiscal version of that assertion goes something like 'the rich are powerful and they dont like taxes, hence we...

This paper analyzes the role of narrowly selfish and other-regarding preferences for the median voter in a Meltzer-Richard (1981) framework. We use computerized and real human co-players to distinguish between these sets of motivations. Redistribution to real co-players has a negative effect on...

Due to behavioral effects triggered by redistributional interventions, it is still an open question whether government policies are able to effectively reduce income inequality. We contribute to this research question by using different country-level data sources to study inequality trends in...

This paper uses pseudo panel techniques and a fixed effects estimator to analyse the determinants of preferences for redistribution in 34 European countries over the period 2002-2012. The data is drawn from the six available waves of the European Social Survey. The main result is that changes in...