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Monday, August 20, 2012

Leonhardt: Possible Causes of the Income Slump

by Calculated Risk on 8/20/2012 04:55:00 PM

David Leonhardt writes at Economix: The 14 Potential Causes of the Income Slump

Why has median household income just endured its worst 12-year stretch since the Great Depression?

The immediate answer to that question is that economic growth has slowed and inequality has risen. The pie isn’t growing very quickly, and the few new slices are going to a disproportionately small portion of the population.

But that answer is really just an accounting answer. The more important questions are why economic growth has slowed and why inequality has risen – not just over the last 12 years but, less severely, since the early 1970s as well.
Leonhardt has a poll for readers to rank 14 potential causes on why American household income has stagnated including globalization, demographics, fiscal policy, innovation and much more. Leonhardt concludes:
In coming days, I’ll be writing posts about what economists see as the major causes.
Should be in interesting series.