Document Type
Article
Publication Date
7-1-2018
Abstract
The high level of debt among households outside the top end of the income distribution has led many economists to assert that household debt has been an important component of the increase in income inequality in the United States. In addition, the yield spread provides information about the overall condition of the economy and may also be tied into the distribution of income. The paper's results show that increases in the yield spread and household debt correspond with increases in top income shares, resulting in increases in income inequality. However, as household debt and income inequality increase, the yield spread contracts, which suggests future economic contraction. Thus, rising inequality may signal future economic weakness.
DOI
10.1002/ijfe.1616
MSU Digital Commons Citation
Berisha, Edmond and Meszaros, John, "Household Debt, Expected Economic Conditions, and Income Inequality" (2018). Department of Economics Faculty Scholarship and Creative Works. 27.
https://digitalcommons.montclair.edu/economics-facpubs/27
Published Citation
Berisha, E., & Meszaros, J. (2018). Household debt, expected economic conditions, and income inequality. International Journal of Finance & Economics, 23(3), 283-295.