Does income inequality affect aggregate consumption? Revisiting the evidence

Jesus Crespo Cuaresma, Jozef Kubala, Kristina Petrikova

Publikation: Working/Discussion PaperWU Working Paper

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The standard Keynesian view predicts that equalization of the income distribution leads to an increase in aggregate consumption. We revisit the analysis carried out by the seminal empirical contributions which test such a hypothesis using modern econometric methods and the most comprehensive dataset existing on income distribution measures. Our results indicate that there is no substantive empirical evidence of an effect of income inequality on aggregate consumption. (authors' abstract)
HerausgeberWU Vienna University of Economics and Business
PublikationsstatusVeröffentlicht - 2016


ReiheDepartment of Economics Working Paper Series

WU Working Paper Reihe

  • Department of Economics Working Paper Series