Narayana Kocherlakota – The Rich Are Different, and It Matters

Inequality in the U.S. depends on how you look at it: Some groups of rich households, for example, have fared much differently than others. Such nuances are crucial in understanding the phenomenon — and what policy makers should do about it.

Let’s start by focusing on the income of the top 1 percent of Americans, compared to that of the top 10 percent. As of 2014, a household needed an annual income of at least $423,090 to be in the first group, about 3.5 times the threshold for the second group, according to data compiled by the economists Thomas Piketty and Emmanuel Saez. That’s close to the largest difference on records going back to 1974, with one exception: The gap was bigger just before the recession of 2007-2009, during which it fell sharply. Here’s a chart:

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