The paper uses 1980 to 2000 Panel Study of Income Dynamics (PSID) data to study the short-run effect of a stock market appreciation on U.S. household income inequality. Fixed-effects regressions suggest that a stock market appreciation raises the incomes of stockholder households more than...

How household incomes respond to GDP and stock price growth is important for an understanding of the economic costs of business cycles and the driving forces of income inequality over time. This article examines to what extent household incomes react differently across income distribution...