Income Quotes (72 quotes)
In general, as income inequality worsens: More income shifts to the wealthy, who tend to spend less of each marginal dollar, causing consumption and therefore economic growth to slow; Income mobility falls, meaning the parents' income is more likely to predict their children's income; Middle and lower-income families borrow more money to maintain their consumption, a contributing factor to financial crises; and The wealthy gain more political power, which results in policies that further slow economic growth.
Krueger wrote in Restoring a greater degree of fairness to the U. Krueger wrote that borrowing likely helped many households make up for this shift, which became more difficult in the wake of the — recession.
A strong demand for redistribution will occur in societies where a large section of the population does not have access to the productive resources of the economy. Rational voters must internalize such issues. Increasing inequality harms growth in countries with high levels of urbanization. High and persistent unemployment also has a negative effect on subsequent long-run economic growth. Unemployment may seriously harm growth because it is a waste of resources, because it generates redistributive pressures and distortions, because it depreciates existing human capital and deters its accumulation, because it drives people to poverty, because it results in liquidity constraints that limit labor mobility, and because it erodes individual self-esteem and promotes social dislocation, unrest and conflict.
Policies to control unemployment and reduce its inequality-associated effects can strengthen long-run growth. Grossformer managing director of PIMCOcriticized the shift in distribution of income from labor to capital that underlies some of the growth in inequality as unsustainable, saying: Even conservatives must acknowledge that return on capital investment, and the liquid stocks and bonds that mimic it, are ultimately dependent on returns to labor in the form of jobs and real wage gains.
If Main Street is unemployed and undercompensated, capital can only travel so far down Prosperity Road.
Among economists and reports that find inequality harming economic growth are a December Associated Press survey of three dozen economists',  a report by Standard and Poor's economists Gar AlperovitzRobert ReichJoseph Stiglitzand Branko Milanovic.
A December Associated Press survey of three dozen economists found that the majority believe that widening income disparity is harming the US economy.
They argue that wealthy Americans are receiving higher pay, but they spend less per dollar earned than middle class consumers, the majority of the population, whose incomes have largely stagnated. Higher levels of income inequality increase political pressures, discouraging trade, investment, hiring, and social mobility according to the report.
The main reason for this shift is the increasing importance of human capital in development. When physical capital mattered most, savings and investments were key. Then it was important to have a large contingent of rich people who could save a greater proportion of their income than the poor and invest it in physical capital. But now that human capital is scarcer than machines, widespread education has become the secret to growth.
Keynes’s Psychological Law of Consumption (With Diagram)
They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business. Statement made inas quoted in The Cynic's Lexicon: Lecture "The Suicidal Impulse of the Business Community" ; cited in Filters Against Folly by Garrett Hardin ISBN X The broader and more influential organisations of businessmen have acted to undermine the basic foundation of the free market system they purport to represent and defend.
- Income inequality in the United States
- Wealth Quotes
- Income–consumption curve
By that test, government owns 45 percent of the means of production that produce the national income.
Article "We Have Socialism, Q. The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both. So far, twenty-two people have received the Nobel award in economics.
Not one of them has been female—so, to judge only from the past, the most important thing to do if you want to be a Nobel laureate is to be male.
I hasten to add that the absence of females is not, I believe, attributable to male chauvinist bias on the part of the Swedish Nobel Committee. I believe that the economics profession as a whole would have been nearly unanimous that, during the period in question, only one female candidate met the relevant standards—the English economist Joan Robinsonwho has since died.
The failure of the Nobel Committee to award her a prize may well have reflected bias but not sex bias.
15 quotes on climate change by world leaders | World Economic Forum
The economists here will understand what I am talking about. Twelve of the twenty-two recipients of the Nobel Prize were from the United States, four from the United Kingdom, two from Sweden, and one each from four other countries. So the next lesson is to go to the University of Chicago.
Lives of the laureates The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy.
It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another. The most dramatic period of instability in output was, of course, the period between the two wars, which includes the severe monetary contractions of, and No other 20 year period in American history contains as many as three such severe contractions.
Income inequality in the United States - Wikipedia
This evidence persuades me that at least a third of the price rise during and just after World War I is attributable to the establishment of the Federal Reserve System Any system which gives so much power and so much discretion to a few men, [so] that mistakes — excusable or not — can have such far reaching effects, is a bad system.
It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic — this is the key political argument against an independent central bank To paraphrase Clemenceaumoney is much too serious a matter to be left to the central bankers. As quoted in The Money Masters I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money and equally of no sharp decline in the stock of money that was not accompanied by a severe depression.
As quoted in The Money Masters Joan Robinson, a leading Keynesian and radical, produced a specimen for me to analyze. I said something like, "This is obviously the writing of a foreigner, so it's difficult for me to analyze. But I would say it is written by someone who had considerable artistic but not much intellectual talent.
That was surely my greatest triumph of the year at Cambridge! Two Lucky People In the course of General Westmoreland 's testimony, he made the statement that he did not want to command an army of mercenaries. I stopped him and said, 'General, would you rather command an army of slaves?
University of Chicago Press p. There's a smokestack on the back of every government program.
Milton Friedman on Libertarianism. One of the great mistakes is to judge policies and programmes by their intentions rather than their results. The unions might be good for the people who are in the unions but it doesn't do a thing for the people who are unemployed.
Because the union keeps down the number of jobs, it doesn't do a thing for them. Interview with Brian LambIn Depth Book TV I think it is only because capitalism has proved so enormously more efficient than alternative methods that it has survived at all.
I'm not sure capitalism is the right word. There is a sense in which every society is capitalist. The Soviet Union was capitalist, but it was state capitalism.Consumption function basics - Macroeconomics - Khan Academy
This result also follows from the studies of family budgets of various families at different income levels. The fraction of income spent on consumption by the rich families is lower than that of the poor families. In other words, the rich families save a higher proportion of their income as compared to the poor families. The assumption of diminishing average propensity to consume is a significant part of Keynesian theory of income and employment.
This implies that as income increases, a progressively larger proportion of national income would be saved. Therefore, to achieve and maintain equilibrium at full-employment level of income, increasing proportion of national income is needed to be invested.
If sufficient investment opportunities are not available, the economy would then run into trouble and in that case it would not be possible to maintain full-employment because aggregate demand will fall short of full-employment output.