“Wealth and Poverty” Class 8: Inequality and the macroeconomic mess

Friends,

This week we look at one of the most hidden of all contributors to widening inequality: macroeconomic policies.

America is engaged in recurring fights over public spending, the exploding national debt, the budget deficit, and the role of the Fed. But rarely if ever do we see these fights as parts of the larger picture of who gets what, and why inequality is widening. That’s my goal today.

In case you missed them, here are the classes that have been released so far: Class 1, Class 2, Class 3, Class 4, Class 5, Class 6, and Class 7.

For Class 8, just double-click on the video below, and you’re in the eighth week of class.

The questions I’ll focus on are:

• What’s the effect of macroeconomic policy on inequality?

• What’s the difference between fiscal and monetary policies?

• How fast can the economy grow without igniting inflation?

• How should inflation be remedied?

• How and under what conditions does faster growth reduce inequality?

Don’t worry if you haven’t had a course in macroeconomics! Don’t be intimidated by buzzwords like “fiscal policy” and “monetary policy.” We’ll be approaching the subject from an entirely different direction from standard courses, which rarely if ever explore the distributional consequences of public spending and the Fed.

This week’s readings:

Monetary Policy:

• William B. English, “The Federal Reserve, the New Administration, and the Outlook for the Economy and Monetary Policy,” Brookings Institution, August 25, 2025.

• Rohan Grey, “RIP, Paul Volcker: The Fed Chair Who Thought We Lived Too Well,” The Nation, December 11, 2019.

• Sarah Bloom Raskin, “Building a Financial Structure for a More Stable and Equitable Economy,” Federal Reserve, April 18, 2013.

Fiscal Policy:

• William G. Gale, Ian Berlin, and Samuel I. Thorpe, “How Should the US Address Long-Term Deficits? Lessons from Other Countries,” Brookings Institution, October 15, 2025.

• Bittle, Jake, “The Next Austerity Battle Will Be Fought in the States,” The American Prospect, April 8, 2020.

• John Cassidy, “The Demand Doctor,” The New Yorker, October 3, 2011.

For a full list of readings and the student handout for today’s class, you can visit the course website here.

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A huge thanks to the Wealth and Poverty team — to Michael Lahanas-Calderón, Kyle Parker, Dan Davis, and Emmett Tjen — as well as Coro Fellows Ammar Ansari and Meagan Turner for preparing these course materials to be shared with all of you. And to Heather Kinlaw Lofthouse for making all this happen on this page.