FRBNY Liberty Street Economics Blog — Crisis Chronicles

FRBNY Liberty Street Economics Blog — Crisis Chronicles

Crisis Chronicles: The Panic of 1819—America’s First Great Economic Crisis

Crisis Chronicles: The Panic of 1825 and the Most Fantastic Financial Swindle of All Time

Crisis Chronicles: The Man on the Twenty-Dollar Bill and the Panic of 1837

Crisis Chronicles–The California Gold Rush and the Gold Standard

Crisis Chronicles: Railway Mania, the Hungry Forties, and the Commercial Crisis of 1847

Crisis Chronicles: Defensive Suspension and the Panic of 1857

Crisis Chronicles: The Cotton Famine of 1862-63 and the U.S. One-Dollar Note

Crisis Chronicles: The Gold Panic of 1869, America’s First Black Friday

Crisis Chronicles: Gold, Deflation, and the Panic of 1893 Liberty Street Economics

The Final Crisis Chronicle: The Panic of 1907 and the Birth of the Fed Liberty Street Economics

David F. Ruccio — Inequality and the current crises

Mainstream economists (like Brad DeLong) can’t seem to find any connections between growing inequality and the current crises. But it’s not a problem for Federal Reserve Board Governor Sarah Bloom Raskin.

Yes, this is the same Raskin who recently decided to look beyond capitalism for a solution to the current crises. In an extension of those remarks, she set out to examine how “economic marginalization and financial vulnerability, associated with stagnant wages and rising inequality, contributed to the run-up to the financial crisis and how such marginalization and vulnerability could be relevant in the current recovery.”

Here’s her argument in a nutshell:

The representative agent assumed in neoclassical equilibrium modeling ignores the complexity of relevant conditions, like worker income that affects aggregate demand. You know, like we've been saying.

Real-World Economics Review Blog
Inequality and the current crises
David F. Ruccio | Professor of Economics, Notre Dame