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"Although today high levels of inequality in the United States remain a pressing concern for a large swath of the population, monetary policy and credit expansion are rarely mentioned as a likely source of rising wealth and income inequality. [...]
The rise in income inequality over the past 30 years has to a significant extent been the product of monetary policies fueling a series of asset price bubbles. Whenever the market booms, the share of income going to those at the very top increases.[...]
[F]inancial institutions benefit disproportionately from money creation, since they can purchase more goods, services, and assets for still relatively low prices. This conclusion is backed by numerous empirical illustrations. For instance, the financial sector contributed massively to the growth of billionaire's wealth"
Source: https://mises.org/library/how-central-banking-increased-inequality
I'll leave my comments as comments, but note that The Mises Institute is proudly, one might say almost by definition, Austrian School. Both the Institute and the School have had their fair share of criticism. Which of course doesn't mean that individual author is wrong on this particular matter. -- Ed.(FP)
(Score: 0) by Anonymous Coward on Wednesday August 23 2017, @10:07AM
I think everyone (including Baumol) is getting a myopic view of what is going on: it is a reversed "broken window fallacy".
Simply, productivity increase makes whole society better of, but in that enhancement, large groups, especially the ones which became more productive, are left behind - in richer society, they can be compensated less and still get by, or, in other words, their lagging behind is essentially the way increased productivity manifests itself, and those whose productivity stayed the same (e.g. performers of classical music) are actually fixed points and they have only seemingly advanced (an effect of inflation).