Does income inequality affect aggregate consumption? Revisiting the evidence

Crespo Cuaresma, Jesus and Kubala, Jozef and Petrikova, Kristina (2016) Does income inequality affect aggregate consumption? Revisiting the evidence. Department of Economics Working Paper Series, 210. WU Vienna University of Economics and Business, Vienna.

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Abstract

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)

Item Type: Paper
Keywords: Inequality / aggregate consumption / average propensity to consume
Classification Codes: JEL E22, D31
Divisions: Departments > Volkswirtschaft
Depositing User: Claudia Tering-Raunig
Date Deposited: 07 Jan 2016 10:37
Last Modified: 22 Oct 2019 00:41
URI: https://epub.wu.ac.at/id/eprint/4787

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