The Rate of Return on Everything, 1870–2015

Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, Alan M. Taylor. This paper answers fundamental questions that have preoccupied modern economic thought since the 18th century. What is the aggregate real rate of return in the economy? Is it higher than the growth rate   […]

Unequal opportunity, unequal growth

Marrero, Gustavo Alberto, Rodriguez, Juan Gabriel and Van Der Weide, Roy. This paper argues that inequality can be both good and bad for growth, depending on what inequality and whose growth. Unequal societies may be holding back one segment of the   […]

Institutions and Growth in Europe

Klaus Masuch, Edmund Moshammer, Beatrice Pierluigi. This paper provides empirical evidence in support of the view that the quality of institutions is an important determinant of long-term growth of European countries. When also taking into account the initial level of   […]

Recent Declines in Labor’s Share in US Income: A Preliminary Neoclassical Account

Robert Z. Lawrence. Over the past decade, the US economy has been plagued by sluggish wage growth and rising income inequality. The debate over inequality in the 1980s and 1990s focused on the growing disparity between the earnings of skilled   […]

Making Inclusive Growth Happen

Inclusive Growth, which is a new approach to economic growth that aims to improve living standards and share the benefits of increased prosperity more evenly across social groups, has become a major challenge for many countries around the world. This   […]

Fiscal policy and income inequality

IMF. Fiscal policy is the primary tool for governments to affect income distribution. Rising income inequality in advanced and developing economies has coincided with growing public support for income redistribution. This comes at a time when fiscal restraint is an   […]

Will income inequality cause a middle-income trap in Asia?

Egawa, Akio. The Asian economy is expected to realise favourable growth during the first half of this century, but there is no guarantee. There is a discussion about a ‘middle-income trap’, which refers to a country that has realised rapid growth   […]

Political Economy: Success or Failure?

Frey, Bruno. Political Economy and Public Choice have studied the interactions between the economy and the polity for over 60 years now. The present paper endeavours to provide a critical discussion of this literature and its achievements. In particular, it   […]

Delivering growth while reducing deficits: lessons from the 1930s

Crafts, Nicolas. Conditions in the 1930s were very similar to those found today: interest rates were already low, the government deficit needed to come down, and the world economy was in disarray. Yet the UK economy grew by almost 20   […]

What is holding Italy back?

Gros, Daniel. This contribution by CEPS Director Daniel Gros lays the blame for Italy’s poor growth, which presently poses an existential threat to the entire eurozone, squarely on the country’s abysmal record on such governance factors as corruption and the   […]