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Macroeconomic Determinants of the Income Shares of the Very Highest Income Groups

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  • DiPietro, William R.
  • Anoruo, Emmanuel
  • Sawhney, Bansi

Abstract

By nature, people are guided by self-interests. Although all income groups have a stake in economic matters, the highest income groups are likely to have a much greater say in affecting the macro economy. Identifying the interests of higher income groups with regard to the economy is, therefore, important. It suggests where the effective energies of these potent groups are likely to be channeled, and allows one to assess the extent to which their objectives are in tune with the agenda of the broader society. This study uses the Phillips-Hansen fully modified OLS procedure to investigate the interrelationship between four key macroeconomic variables and the seven topmost income shares. We find that the extent of trade, inflation rate, unemployment, and real interest rate are highly significant in explaining the shares of the highest income groups in the United States.

Suggested Citation

  • DiPietro, William R. & Anoruo, Emmanuel & Sawhney, Bansi, 2005. "Macroeconomic Determinants of the Income Shares of the Very Highest Income Groups," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 1(1), pages 1-19, June.
    • Handle: RePEc:ags:reapec:143486
    DOI: 10.22004/ag.econ.143486
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    References listed on IDEAS

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    Cited by:

    1. Ullah, Assad & Zhao, Xinshun & Kamal, Muhammad Abdul & Zheng, JiaJia, 2020. "Modeling the relationship between military spending and stock market development (a) symmetrically in China: An empirical analysis via the NARDL approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 554(C).
    2. DiPietro, William R. & Anoruo, Emmanuel & Sawhney, Bansi, 2005. "The Determinants of the Very Highest Income Shares: The Case of France," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 1(2), pages 1-16.
    3. Nikolaos Papanikolaou, 2020. "Markov-Switching Model of Family Income Quintile Shares," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(2), pages 207-222, June.

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