Research AreasPolitical
Globalization & Macroeconomics

PERI's research on political economy is broadly gauged, including explorations in economic theory, history, philosophy, and policy that are tied to the overall PERI project of creating, as Robert Heilbroner put it, “a workable science of morality” within the discipline of economics. 

The Impact of the Recession on Racial Wealth Disparity

January 2012 -- Jeannette Wicks-Lim explores how the Great Recession has created the largest setback in wealth equality in the U.S. in the last quarter century, leaving the typical black household with less wealth than at any time since 1984. With fewer assets than whites, black households are more vulnerable to financial stresses, such as layoffs or medical crises, and less able to access the stepping stones of economic advancement — such as college or home ownership. Wicks-Lim explores the policies and practices that have led to this reality, and recommends policies that could be targeted specifically to building wealth among black households. 

>> Read “The Great Recession in Black Wealth”

The Roots of Inequality Worldwide

December 2011 -- Azizur Khan explores the causes behind the growth in both inequality and the social tolerance of that inequality over the last seven decades. He argues that these trends were not determined by inevitable technological, economic or historical forces, but were shaped by policy choices. Khan maintains that the demise of socialist systems and the quest for non-capitalist development in the Third World, alongside the emergence of capitalism as the only economic system, do not signal the end of the pursuit of equality. Khan concludes that plenty of paths remain available to societies that are serious in their pursuit of the goal. 

>> Download "Inequality in Our Age"

The Impact of the Recession on Inequality in the U.S.

October 2011 -- In this chapter for an international study, "The Great Recession and the Distribution of Household Income," Jeffrey Thompson and Timothy Smeeding highlight the degree to which economic and social policies, such as the federal stimulus, unemployment insurance, food stamps, and Social Security shielded the general population from substantial increases in income inequality due to the recession. They examine the impact on households, such as job losses, increases in poverty, and increases in households “doubling up” as a coping mechanism. Thompson and Smeeding find that potential income inequality increases were suppressed in large part because of the effect of the elderly population, which saw public transfers boosted, and who worked more hours through the recession.

>> The full study can be downloaded from the Fondazione Rodolfo Debenedetti

How Does Rising Inequality Effect Us All?

June 2011 -- Jeffrey Thompson and Elias Light explore the effect of inequality on the standard of living of middle-income and low-income households. In the context of rising inequality, they find that increased overall growth is not necessarily a suitable proxy for standard of living, since growth patterns are not always uniform for the entire income distribution. The results of this study indicate that increases in the top share of income (whether of the top 10 percent or top one percent) lead to declines in the actual incomes (and earnings) of low and middle income households. 

>> Download the four-page Research Brief
>> Download the full report

Engel's Law Today

January 2011 -- One of the most enduring relationships in economics is that proposed by Ernst Engel in 1857: “The poorer is a family, the greater is the proportion of the total outgo [family expenditures] which must be used for food. … The proportion of the outgo used for food, other things being equal is the best measure of the material standard of living of a population.” The 150th anniversary of Engel’s law passed in 2007. With this in mind, Richard Anker looks at the extent to which Engel’s law is relevant in today’s world by looking across countries at the relationship between the share of household expenditure spent on food and national income per capita.

>> Download "Engel’s Law Around the World 150 Years Later"

The Uneven Record of State Socialism

May 2010 -- Patrick Hamm, David Stuckler and Lawrence King ask "Why did the transitions from state socialism to capitalism result in improved growth in some countries but significant economic declines in others? Three main arguments have been advanced: (1) the most successful countries rapidly implemented privatization, liberalization, and stabilization policies; (2) failures were unrelated to economic policies but occurred because of a poor institutional environment; and (3) the policies were counterproductive because they damaged the state. Using a sample of 30 countries between 1990 and 2000, the authors present a state-centered theory which argues that the more radical the privatization program, the worse the subsequent performance. 

>> Download "The Governance Grenade: Mass Privatization, State Capacity and Economic Growth in Post-communist Countries"