The U.S.-Sino different links between income and consumption inequality

This work shows that the U.S.-Sino diverse links between income and consumption inequality have to do with their different development levels and policy orientations. Foreign trade, financial markets, and capital flows are used for consumption smoothing in the U.S. but for economic growth in China....

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Bibliographic Details
Published in:Applied economics letters 2021-05, Vol.28 (9), p.713-716
Main Authors: Zhao, Qingbin, Lei, Chun Kwok, Peng, Lei, Gu, Xinhua
Format: Article
Language:English
Subjects:
Capital
Capital movement
Consumption
consumption inequality
Economic analysis
Economic growth
Economic theory
Economics
global imbalances
Income inequality
trade
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Summary:This work shows that the U.S.-Sino diverse links between income and consumption inequality have to do with their different development levels and policy orientations. Foreign trade, financial markets, and capital flows are used for consumption smoothing in the U.S. but for economic growth in China. Other smoothing schemes are better developed in the U.S. than in China. As a result, income and consumption inequalities are linked loosely in the U.S. burdened with an external deficit but closely in China faced with a persist surplus.
ISSN:1350-4851
1466-4291
DOI:10.1080/13504851.2020.1771268