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• Working Paper | HBS Working Paper Series | 2013

  Inequality and Decision Making: Imagining a New Line of Inquiry

  David Moss, Anant Thaker and Howard Rudnick

  The substantial increase in inequality in the United States over the past three decades has provoked considerable debate, with some analysts characterizing rising inequality as among the greatest threats facing the nation and others dismissing it as little more than a hiccup – or even celebrating it as a favorable development – in the progress of American capitalism. Despite numerous claims in popular venues that high inequality has slowed growth, precipitated financial instability, and profoundly distorted the nation’s political system, our review of the literature finds no academic consensus on the consequences of inequality for the health of the economy or the democracy, or for nearly any other macro-level outcome. With the academic community reaching inconclusive and conflicting findings, we suggest that careful empirical study of possible mechanisms by which income inequality may exert macro-level effects is warranted. We suggest further that that one potential mechanism that may be especially worthy of investigation relates to possible effects of high or rising inequality on individual decision making. Drawing on nascent research, we examine a handful of pathways through which inequality may plausibly influence individual decisions. Finally, we propose ways that these and other pathways might be productively explored and assessed through behavioral experiments. By bringing together what are today two separate areas of research – decision making and inequality (or social disparity) – this new line of inquiry could help to break the stalemate that has, until now, characterized the study of inequality and its consequences.

  Citation:

  Moss, David, Anant Thaker, and Howard Rudnick. "Inequality and Decision Making: Imagining a New Line of Inquiry." Harvard Business School Working Paper, No. 13–099, June 2013.

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• Case | HBS Case Collection | 2013 (Revised from original 2012 version)

  Perspectives on the Great Depression

  Julio J. Rotemberg

  The case assembles texts giving perspectives on the Great Depression by Franklin Delano Roosevelt, John Maynard Keynes, Milton Friedman, Anna Schwartz and Ben Bernanke. This should allow for a discussion of the role of fiscal and monetary policies in reaching and escaping outcomes in which the interest rate is close to zero for a long time.

  Keywords: Great Depression; Keynesian multiplier; monetary policy; zero lower bound of interest rates; role of expectations in Macroeconomics; Performance Expectations; History; Policy; Interest Rates; Macroeconomics;

  Citation:

  Rotemberg, Julio J. "Perspectives on the Great Depression." Harvard Business School Case 713-056, April 2013. (Revised from original November 2012 version.)

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• Case | HBS Case Collection | 2013

  The Struggle Over Public Education in Early America

  David Moss, Amy Smekar and Gregory Dibella

  Citation:

  Moss, David, Amy Smekar, and Gregory Dibella. "The Struggle Over Public Education in Early America." Harvard Business School Case 713-077, April 2013.

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