Shared Prosperity Ended in the Mid-70’s

Shared prosperity seems to have ended in the mid 1970s:

Shared Prosperity Lost, by Chad Stone, CBPP: Describing the social and economic costs of growing income inequality, economist Robert Frank explained in yesterday’ New York Times that while the first three decades after World War II were a time of broadly shared prosperity, income gains over the next three decades went almost entirely to the very wealthy. You can see the striking contrast in the graph below. …

The chart shows the divergent trends between the rich and everyone else since the 1970s that we have analyzed in greater detail here and here. …

Why has this happened? Since time is short, here’s a debate from the past on this topic among Paul Krugman, Brad DeLong, Dean Baker, Greg Mankiw, Alex Tabarrok, me, and others (much of the debate is in the links referenced in the posts): Policy and Income Inequality, Krugman: Gilded Age II, Here We Come, Why Oh Why is Income Inequality Increasing?.

About Mark Thoma 243 Articles

Affiliation: University of Oregon

Mark Thoma is a member of the Economics Department at the University of Oregon. He joined the UO faculty in 1987 and served as head of the Economics Department for five years. His research examines the effects that changes in monetary policy have on inflation, output, unemployment, interest rates and other macroeconomic variables with a focus on asymmetries in the response of these variables to policy changes, and on changes in the relationship between policy and the economy over time. He has also conducted research in other areas such as the relationship between the political party in power, and macroeconomic outcomes and using macroeconomic tools to predict transportation flows. He received his doctorate from Washington State University.

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