2019/12/18 by Mark Setterfield, Yun K Kim, Yun K. Kim · 1 citation
Economics, Econometrics and Finance · Social Sciences · #Economic Theory and Policy #Housing, Finance, and Neoliberalism #Political Economy and Marxism
paper · doi:10.1093/cje/bez067
openalex publication_date 2019/12/18 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/27
Abstract We model US household debt accumulation during the neoliberal boom (1990–2007) as a response to emulation effects and the decline of the social wage, which has ‘privatised’ an increasing share of the costs of providing for services such as health and education. The debt dynamics of the US economy are then studied under alternative assumptions about the configuration of distributional variables, which is shown to differ across varieties of capitalism that have ‘neoliberalised’ to different degrees. A key result is that distributional change alone will not make contemporary US capitalism financially sustainable due, in part, to the paradoxical nature of inequality as a spur to household borrowing, and hence a source of both demand-formation and financial fragility. Achieving sustainability requires, instead, more wide-ranging reform.