Chapter

How Economic Shocks Change Income Distribution

Rebecca M. Blank

in Changing Inequality

Published by University of California Press

Published in print July 2011 | ISBN: 9780520266926
Published online March 2012 | e-ISBN: 9780520950191 | DOI: http://dx.doi.org/10.1525/california/9780520266926.003.0006
How Economic Shocks Change Income Distribution

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This chapter evaluates the evidence from past history, largely but not entirely within the United States, to indicate how major economic shocks appear to affect income distribution over time. It states that economic shocks include catastrophic events that occur at a particular point in time and may also refer to major economic changes that unfold more slowly over time, such as new technologies that expand productivity and create new opportunities for wealth creating, or the opening up of new frontiers and the availability of additional land and mineral resources. It explains that historical evidence indicates that the effects of a given economic shock are rarely predetermined but may be heavily influenced by the political institutions and the political economy of the nation when the shock occurs. It discusses that large economic shocks often influence public attitudes and political structures, creating new patterns in the distribution of economic resources as well as political access.

Keywords: United States; income distribution; economic shocks; political institutions; political economy; public attitudes; political structures; distribution of economic resources; political access

Chapter.  6732 words. 

Subjects: Race and Ethnicity

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