Cyclical Fluctuations, Macroeconomic Policy, and the Size Distribution of Income: Some Preliminary Evidence

Abstract

The question has been asked as to how changes in economic growth affect income distribution. Blinder and Esaki reframed the question to consider inflation and time trends in addition to aggregate income growth. The purpose of this paper is to widen the scope even more; specifically, the question is whether policy or business cycle measures explain most of the forecast error variance in the size distribution of income.