Holy crap! the “why didn’t I think of that?” edition

Fully 2/3rds of growth in inequality over the last decade can be attributed to different rates of inflation experienced by the rich and poor. MR has the scoop.

4 thoughts on “Holy crap! the “why didn’t I think of that?” edition”

  1. That doesn’t compute. Real income is real income is real income. If rich people buy stuff that has been inflating more than poor people, then their nominal income should be deflated more. Once you deflate appropriately, much of the growing difference in incomes is just nominal.

  2. Had their budget set not shrunk? Have they not substituted? Maybe it shrank where it was not binding the worst…

    I understand the idea and, on second thought, my problem might be with the formulation.

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