Tariffs and Income Distribution: Some Empirical Evidence for the United States

Does inflation vary across the income distribution? This article reviews the growing literature on inflation inequality, describing recent advances and opportunities for further research in four areas. First, new price index theory facilitates the study of inflation inequality. Second, new data show that inflation rates decline with household income in the United States. Accurate measurement requires granular price and expenditure data because of aggregation bias. Third, new evidence quantifies the impacts of innovation and trade on inflation inequality. Contrary to common wisdom, empirical estimates show that the direction of innovation is a significant driver of inflation inequality in the United States, whereas trade has similar price effects across the income distribution. Fourth, inflation inequality and non-homotheticities have important policy implications. They transform cost-benefit analysis, optimal taxation, the effectiveness of stabilization policies, and our understanding of secular macroeconomic trends—including structural change, the decline in the labor share and interest rates, and labor market polarization. Expected final online publication date for the Annual Review of Economics, Volume 13 is August 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

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The Stability of the Reproduction Scheme: Theoretical Discussion and Empirical Evidence for the United States, 1948–1980

Lecture Notes in Economics and Mathematical Systems - Competition, Instability, and Nonlinear Cycles ◽

10.1007/978-3-642-51699-3_14 ◽

1986 ◽

pp. 304-323

Author(s):

Michel Juillard

Keyword(s):

United States ◽

Empirical Evidence ◽

The United States ◽

Theoretical Discussion ◽

The Stability

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An Examination of Audit Quality Surrounding Within-Firm Engagement Office Changes

Journal of Accounting Auditing & Finance ◽

10.1177/0148558x211059627 ◽

2021 ◽

pp. 0148558X2110596

Author(s):

Adam J. Greiner ◽

Julia L. Higgs ◽

Thomas J. Smith

Keyword(s):

United States ◽

Knowledge Transfer ◽

Empirical Evidence ◽

Audit Quality ◽

Resource Constraints ◽

Discretionary Accruals ◽

The United States ◽

Primary Analysis ◽

Quality Deterioration ◽

Main Association

We examine the relation between within-firm office changes and audit quality in the United States. Our primary analysis documents a reduction in audit quality, measured using abnormal discretionary accruals and restatements, when the client is transferred to a smaller within-firm office (downsize effect). We are unable to find evidence that clients experience significant improvement in audit quality among transfers to a larger within-firm office (upsize effect). We then condition our sample on the change in the number of public clients of the receiving office to better understand the source of the underlying association. We find that our downsize effect is driven by offices experiencing a decrease in the number of public clients, suggesting that our main association is not entirely the result of resource constraints for the receiving office. We posit that this finding is consistent with audit quality deterioration among within-firm office changes to smaller offices driven, in part, by the receiving office’s inability to adequately overcome the knowledge transfer frictions that accompany a move to a new office. Our findings offer empirical evidence on consequences of within-firm office changes and are particularly relevant to regulators and preparers.

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Book Reviews

Journal of Economic Literature ◽

10.1257/jel.59.2.651.r4 ◽

2021 ◽

Vol 59 (2) ◽

pp. 659-661

Keyword(s):

United States ◽

Income Distribution ◽

The United States ◽

Income Growth ◽

University Of Michigan

Charles Brown of University of Michigan reviews “United States Income, Wealth, Consumption, and Inequality” edited by Diana Furchtgott-Roth. The Econlit abstract of this book begins: “Ten papers examine income trends, consumption, wealth, and inequality in the United States, focusing on the root causes of income growth and inequality, as well as ways to measure income and income distribution.”

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Economic Policy

The United States and Canada ◽

10.1093/oso/9780190870829.003.0007 ◽

2019 ◽

pp. 173-195

Author(s):

William Keech ◽

William Scarth

Keyword(s):

United States ◽

Economic Growth ◽

Economic Policy ◽

Fiscal Policy ◽

Income Distribution ◽

Political Institutions ◽

Productivity Growth ◽

The United States ◽

Economic Policies ◽

Sustainable Fiscal Policy

This chapter identifies the differing policies and outcomes that Canadians and Americans have pursued with respect to economic growth, stabilization, and income distribution, and it analyzes several factors that can partially explain why divergent policy choices have emerged. The United States (U.S.) has recorded better productivity growth, while Canada has achieved a more sustainable fiscal policy, a less fragile financial sector, and more generous distributional policies. These contrasting outcomes are related to differences in size and geography, in political culture, and in political institutions. The analysis also considers how much it may be possible for each country’s policymakers to benefit from the other’s experiences. While identifying some lessons in this regard, the authors conclude that the sheer difference in the size of the two economies affects which economic policies can be expected to be effective. As a result, it is concluded that convergence in economic policymaking will remain somewhat limited.

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