Daron Acemoglu is on the latest edition of EconTalk, discussing the role income inequality played in creating the financial crisis. Rather than the usual narrative (stagnant median incomes led to a greater demand for credit), Acemoglu “suggests a simpler story where the financial sector through its political influence distorted the rules of the game, benefiting executives in the industry, which in turn led to outsized rewards and ultimate instability in the financial industry”.

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