Extreme inequality in the US is making a major economic problem even worse

US inequality may have prolonged the Great Recession, and leaves the economy vulnerable to weak growth and the risk of fresh downturns.  New research from the Chicago Fed explores “whether the widening gap between the rich and poor has any direct effects on macroeconomic aggregates.” The authors find that “various measures of household constraints have permanently increased in the wake of the Great Recession, raising the need for caution.”

US inequality has become so

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