IMF: unequal income distribution raises leverage
An IMF paper published on Wednesday shows that high leverage and crises can arise as a result of changes in income distribution.
Michael Kumhof and Romain Ranciere, the paper's authors, explore the links between the income advantage enjoyed by high income households and higher debt leverage among poor and middle income households as a result of increases in the bargaining power of high income households.
Kumhof and Ranciere note that the financial sector grows rapidly when high income households
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