Roberto Iacono, Elisa Palagi, 27 February 2021

A crucial element in the study of wealth inequality is the difference between the rate of return and the growth rate of income. However, the focus on these measures at the aggregate level belies important heterogeneities along the wealth distribution. This column uses rich micro-data from Norway to show that wealthy households enjoy higher rates of return relative to growth, while the opposite is true for poorer household and the lower-middle-income class. It discusses policy implications of these findings for capital and wealth taxation in order to curb the rise of inequality. 

Marius Brülhart, Helen Simpson, 12 June 2015

The evidence on how industry-level agglomeration affects government taxation is mixed. This column argues that local governments offer subsidies to favour pre-existing employment in locally agglomerated industries. This finding is in line with theories of policy capture rather than government taxation of agglomeration benefits. 

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