The authors argue that deteriorating social conditions are becoming increasingly important to economic policy as traditional measures like unemployment fail to capture broader prosperity. With fiscal policy gaining influence and the Fed broadening its employment lens, distributional outcomes could increasingly shape policy decisions and markets.
Social Conditions Are an Increasing Consideration for How the Economy Will Be Managed
Bridgewater
Melissa Saphier, Karen Karniol-Tambour
Article
1 Pages
Key Takeaways
Social Conditions Diverged: Over the prior 10 years, Bridgewater’s social index shows infrastructure deteriorating 1.9%, while inequality and education measures each declined 1.0%.
Transfers Reshaped Income: Government transfers represented 46% of total income for households in the 0 to 60th percentiles, contributing 40% of the change in income.
Higher Earners Benefited Less: For households in the 90 to 100th percentiles, total income declined 4%, while government transfers represented just 2% of total income.
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