This paper highlights how changes in the composition of demand affect income dispersion in the short run. We first document how the share of aggregate spending dedicated to labour-intensive goods and services shrinks (expands) during downturns (booms), and argue that this contributes to the...

Most papers explaining the macro causes of the U.S. Great Recession focus on the behavior of the middle class: how its saving rate declined in the pre-crisis years, then surged following the crisis. This paper argues that the saving rate of the rich followed a similar pattern, the result of...

We develop a micro-founded general equilibrium model with heterogeneous agents to identify pertinent constraints to financial inclusion. We evaluate quantitatively the policy impacts of relaxing each of these constraints separately, and in combination, on GDP and inequality. We focus on three...

This paper investigates the empirical characteristics of income inequality in China and a panel of BRIC+ countries over the period 1980-2013, with a focus on the redistributive contribution of fiscal policy. Using instrumental variable techniques to deal with potential endogeneity, we find...

The rich live longer than the poor, but relatively little is known about the evolution of health inequality across the lifecycle. Using rich administrative data from the Netherlands, we develop an index of chronic disease burden based on the projected contribution to old-age mortality. Chronic...

When and how do natural disasters worsen within-country income inequality? We highlight the channels through which natural disasters may have distributional effects and empirically analyze when and which type of disasters affect inequality in advanced economies (AEs) and in emerging and...

This paper conducts micro-simulations to study the distributional effects of several tax measures in Japan, considering households' heterogeneity in terms of both income and wealth. Simulation results suggest that increasing the consumption tax rate and strengthening the recurrent tax on...

Using individual-level data for 30 European countries between 1983 and 2019, we document the extent and earning consequences of workers' reallocation across occupations and industries and how these outcomes vary with individual-level characteristics, namely (i) education, (ii) gender, and (iii)...

While a carbon tax is widely acknowledged as an efficient policy to mitigate climate change, adoption has lagged. Part of the challenge resides in the distributional implications of a carbon tax and a belief that it tends to be regressive. Even when not regressive, poor households could be hurt...