Low long-term real rates can increase inequality in US – study
Authors say low rates cause wealthy to invest more in their children’s education
A long-term environment of low real interest rates can increase labour income inequality, argue researchers with the Federal Reserve Bank of Chicago.
Their paper, published on August 8, says such an environment can reduce intergenerational social mobility.
The authors – Paymon Khorrami and Jung Sakong – say that during low real rate environments, high-wealth households will invest in their children far more than low-wealth households. In doing so, high wealth households will increase the overall
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