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How Inequality Drives America’s Affordability Crisis: A Microeconomic Perspective

Robert H. Frank applies microeconomic principles to show why rising inequality, not inflation, underpins today’s affordability concerns.

  • Higher Education
  • On-demand
  • Event
  • Economics
  • Principles of Microeconomics
  • 90 Minutes
  • On-Demand Video

Description

Public debate often attributes today’s affordability challenges to inflation. Economist Robert H. Frank challenges that narrative, arguing instead that the affordability crisis confronting households and governments alike is best understood through the lens of microeconomics, specifically the interaction between rising income inequality, behavioral responses, and market outcomes.

The analysis offers economists a theory grounded, behaviorally informed framework for understanding the affordability crisis, with insights directly applicable to research, policy discussions, and the economics classroom.

Key takeaways include:

  • A sharper explanation for affordability pressures beyond inflation
  • Behavioral insight into inequality, consumption norms, and market outcomes
  • Perspective from a leading scholar in behavioral economics

About Your Speaker

  • Robert H. Frank -

    Robert H. Frank

    Robert H. Frank is the Henrietta Johnson Louis Professor emeritus of Management and professor emeritus of economics at the Samuel Curtis Johnson Graduate School of Management and a distinguished senior fellow at Demos. For more than a decade, his "Economic View" column appeared monthly in The New York Times. He received his BS in mathematics from Georgia Tech, and then taught math and science for two years as a Peace Corps Volunteer in rural Nepal. He holds an MA in statistics and a PhD in economics, both from the University of California at Berkeley. His papers have appeared in the American Economic Review, Econometrica, Journal of Political Economy, and other leading professional journals.

    Frank's books have been translated into 23 languages, including Choosing the Right Pond, Passions Within Reason, Microeconomics and Behavior, Principles of Economics (with Ben Bernanke), Luxury Fever, What Price the Moral High Ground?, Falling Behind, The Economic Naturalist, The Darwin Economy, and Success and Luck. The Winner-Take-All Society, co-authored with Philip Cook, received a Critic's Choice Award, was named a Notable Book of the Year by The New York Times, and was included in Business Week's list of the 10 best books of 1995.

    Frank is a co-recipient of the 2004 Leontief Prize for Advancing the Frontiers of Economic Thought. He was awarded the Johnson School's Stephen Russell Distinguished Teaching Award in 2004, 2010, and 2012, and its Apple Distinguished Teaching Award in 2005.