Mark Stelzner, Ph.D. candidate in the Department of Economics, has written an article titled “Political Contest, Policy Control, and Inequality in the United States, set to appear in the next edition of Review of Keynesian Economics, Vol. 2 No. 3, Autumn 2014. Pp 365-383.
In a democracy where the median income is substantially less than the average, why does the poor majority not implement a significant level of redistribution? Despite fears that democracy would empower the poor majority to such ends, constituents of below average income have a mixed record of utilizing democracy to ameliorate economic inequality in the United States. How do we understand this puzzle? Why does the poor majority not maintain a constant level of redistribution in a democracy? In this paper, I provide a game theoretic answer based on historical research which is in accord with the broad trend in both policy and income inequality in the United States..
Mark Stelzner is publishing a book through Palgrave Macmillan (expected 2015) where he explores the topics analyzed in this paper in more depth. Stelzner also has data work on the income share of the top one percent in the United States during the late 1860s and theoretical work on loss aversion, anchoring, and wage setting powers