02106cas a2200265 a 4500 AALejournalIMF016905 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475522501 1018-5941 BD-DhAAL BD-DhAAL Alichi, Ali. Income Polarization in the United States / Ali Alichi, Kory Kantenga, Juan Sole. Washington, D.C. : International Monetary Fund, 2016. 1 online resource (36 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper uses a combination of micro-level datasets to document the rise of income polarization-what some have referred to as the 'hollowing out' of the income distribution-in the United States, since the 1970s. While in the initial decades more middle-income households moved up, rather than down, the income ladder, since the turn of the current century, most of polarization has been towards lower incomes. This result is striking and in contrast with findings of other recent contributions. In addition, the paper finds evidence that, after conditioning on income and household characteristics, the marginal propensity to consume from permanent changes in income has somewhat fallen in recent years. We assess the potential impacts of these trends on private consumption. During 1998-2013, the rise in income polarization and lower marginal propensity to consume have suppressed the level of real consumption at the aggregate level, by about 3 1\2 percent-equivalent to more than one year of consumption. Mode of access: Internet Kantenga, Kory. Sole, Juan. IMF Working Papers; Working Paper ; No. 2016/121 Full text available on IMF http://elibrary.imf.org/view/journals/001/2016/121/001.2016.issue-121-en.xml IMF e-Library