Income Equality in the Nordic Countries: Myths, Facts, and Lessons

By Magne Mogstad, Kjell G. Salvanes, and Gaute Torsvik

Journal of Economic Literature, September 2025

Policymakers, public commentators, and researchers often cite the Nordic countries as examples of a socioeconomic model that combines low income inequality with prosperity and growth. This article critically assesses that claim by integrating theoretical ...

The Economics of Inequality and the Environment

By Moritz A. Drupp, Ulrike Kornek, Jasper N. Meya, and Lutz Sager

Journal of Economic Literature, September 2025

Environmental degradation and economic inequality are two of the defining challenges of the twenty-first century. We synthesize conceptual mechanisms that underpin inequality–environment linkages and take stock of the relevant empirical evidence. We pro...

Declining Wage Inequality in Developing Countries: The Case of Brazil

By Sergio Firpo and Alysson Portella

Journal of Economic Literature, September 2025

Despite rising inequality in rich countries, many developing economies have experienced a decline in inequality in recent decades. Brazil is a notable example. From 1995 to 2015, its Gini index decreased from 58 to 48 points. An extensive body of research...

A Review Essay of The Economics of Structural Racism by Patrick Mason

By Stephan Lefebvre

Journal of Economic Literature, September 2025

This essay provides a streamlined presentation of stratification economics (SE) in three pillars and comments on Patrick L. Mason's (2023) book The Economics of Structural Racism: Stratification Economics and US Labor Markets. SE, a field that se...

Time to Say Goodbye: The Macroeconomic Implications of Termination Notice

By Tomer Ifergane

American Economic Journal: Macroeconomics, October 2025

Insuring households against unemployment risk is a cornerstone of modern economic policy. Many countries provide unemployment insurance partly by employment protection mandates, most commonly using termination notice mandates. Unlike unemployment insuranc...

Stages of Diversification

By Jean Imbs and Romain Wacziarg

American Economic Review, March 2003

This paper studies the evolution of sectoral concentration in relation to the level of per capita income. We show that various measures of sectoral concentration follow a U-shaped pattern across a wide variety of data sources: countries first diversify, i...

A Goldilocks Theory of Fiscal Deficits

By Atif Mian, Ludwig Straub, and Amir Sufi

American Economic Review, December 2025

We develop a tractable framework for deficit and debt dynamics. A "free lunch" fiscal deficit—one that raises spending without higher future taxes—is sustainable without zero lower bound (ZLB) only when R < G − φ, where φ is the sensitivity of the...

First-Generation Elite: The Role of School Social Networks

By Sarah Cattan, Kjell G. Salvanes, and Emma Tominey

American Economic Review, December 2025

High school students from non-elite backgrounds are less likely to have peers with elite-educated parents than their elite counterparts. This difference in social capital is a key driver of the high intergenerational persistence in elite education. We ide...

Accounting for Wealth Concentration in the United States

By Bariş Kaymak, David Leung, and Markus Poschke

American Economic Journal: Macroeconomics, January 2026

We assess the empirical relevance of different macroeconomic modeling approaches to wealth concentration, using the joint distribution of earnings, capital income, and net worth in combination with an OLG model of household heterogeneity. We find large ea...

The Effects of Biased Labor Market Expectations on Consumption, Wealth Inequality, and Welfare

By Almut Balleer, Georg Duernecker, Susanne Forstner, and Johannes Goensch

American Economic Journal: Macroeconomics, January 2026

We analyze US survey data and document a substantial optimistic bias of households in their expectations about future labor market transitions. We find that low-skilled individuals tend to be strongly overoptimistic, whereas high-skilled individuals have ...

Optimal Taxation and Market Power

By Jan Eeckhout, Chunyang Fu, Wenjian Li, and Xi Weng

American Economic Review, January 2026

Should optimal income taxation change when firms have market power? We analyze how the planner can optimally tax labor income of workers and profits of entrepreneurs. We derive optimal tax rates that depend on markups and identify four distinct components...

Racial Disparities in Housing Returns

By Amir Kermani and Francis Wong

American Economic Review, January 2026

We show that higher rates of distressed home sales (i.e., foreclosures and short sales) among Black and Hispanic homeowners severely reduce realized housing returns for these groups—in particular, to a level below that realized by White homeowners. Yet ...

Power, Property Rights, and the Dynamics of Local Wealth Appropriation

By Dan Cao, Roger Lagunoff, and Yingqi Xu

American Economic Journal: Microeconomics, February 2026

We examine the dynamic connections between local wealth inequality and the local politics of property rights. A jurisdiction comprises a politically dominant in-group and a marginalized out-group. At each date, the jurisdiction exploits weaknesses in due ...

Financial Frictions: Micro versus Macro Volatility

By Renato Faccini, Seungcheol Lee, Ralph Luetticke, Morten O. Ravn, and Tobias Renkin

American Economic Review, February 2026

We argue that consumer credit spreads matter for household choices and that time-varying spreads have important distributional consequences. Studying Danish household data, we show that consumer credit spreads have heterogeneous impact on asset dynamics a...

Wealth, Marriage, and Sex Selection

By Girija Borker, Jan Eeckhout, Nancy Luke, Shantidani Minz, Kaivan Munshi, and Soumya Swaminathan

American Economic Journal: Applied Economics, April 2026

Two mechanisms have been proposed to explain sex selection in India: son preference, in which parents desire a male heir, and daughter aversion, in which dowry payments make parents worse off with girls. Our model incorporates both mechanisms, providing m...

The Long-Term Impacts of Mixing the Rich and Poor: Evidence from Conscript Dorms

By Elias Einiö

American Economic Journal: Applied Economics, April 2026

To what extent is economic success determined by with whom individuals interact socially? We tackle this question by exploiting a large-scale natural experiment in the Finnish conscription. Our research design is based on the alphabetization of dorms, whi...

An Examination of the Influence of Theory and Individual Theorists on Empirical Research in Microeconomics

By Pierre-André Chiappori and Steven D. Levitt

American Economic Review, May 2003

Some Evidence on Race, Welfare Reform, and Household Income

By Marianne P. Bitler, Jonah B. Gelbach, and Hilary W. Hoynes

American Economic Review, May 2003

Changes in the Distribution of Children's Family Income over the 1990's

By Rebecca M. Blank and Robert F. Schoeni

American Economic Review, May 2003

Racial Stigma: Toward a New Paradigm for Discrimination Theory

By Glenn C. Loury

American Economic Review, May 2003

This essay examines interconnections between "race" and economic inequality in the United States, focusing on the case of African-Americans. I will argue that it is crucially important to distinguish between racial discrimination and racial stigma in the ...