The decline of the middle class is causing even more economic damage than we realized

I have just come across an International Monetary Fund working paper on income polarization in the United States that makes an important contribution to the secular stagnation debate. The authors — Ali Alichi, Kory Kantenga and Juan Solé — use standard econometric techniques to estimate the impact of declines in middle class incomes on total consumer spending. They find that polarization has reduced consumer spending by more than 3 percent or about $400 billion annually. If these findings stand up to scrutiny, they deserve to have a policy impact.
Read more: https://www.washingtonpost.com/news/wonk/wp/2016/09/29/the-decline-of-the-middle-class-is-causing-even-more-economic-damage-than-we-realized/?source=Snapzu