The Macroeconomics Matters

St. A publication by the Federal Reserve Bank of St. Louis and the Board of Fed Governors addressed these and other mobility issues.

In their introduction to Economic Mobility: Research and Ideas for Strengthening the Family, Society and the Economy; Louis Boshara, director of the Louis Household Center for Financial Stability, and David Buchholz, Vice President of the Federal Reserve Board, summarized the authors' views on the challenges relations between people and the power or weakness of macroeconomics.

Mobility, Inequality and Macroeconomic Dynamics

Boshara and Buchholz said that in the past few decades the well-documented increase in income inequality and wealth has been accompanied by a constructive increase that attracted the attention of academics, the media and the public.

However, they agreed on how problematic this gap in income and wealth could be. “Some argue that the ability to climb the economic ladder is more important than real inequality, and in fact relative inequality is an incentive to encourage long-term difficulty in moving forward,” he said. In this respect, evidence that economic activity may become stagnant may be even more alarming than evidence of similar inequality. ”

A country may have high (and growing) inequality without worsening economic mobility, the authors pointed out in an article by Economic Mobility writer Scott Winship, who warned that increasing inequality should not be matched to reduced mobility. If American executives earn more than fast food employees, that doesn't mean it's hard to be the CEO of the daughters of a fast food employee in the United States.”