ABSTRACT
Consumer demand in America is affected by three main factors. First, the aggregate demand for consumer goods and services is obviously affected by the aggregate amount of income received by all Americans. Second, net income may be increased beyond the amount that is earned by the use of borrowed credit. Third, the degree of inequality will determine how much of the national income goes to wage and salary earners, who spend most of their income on consumer goods. The chapter examines the behavior of consumer spending over the cycle, and the relationship of consumer spending to national income and to income inequality over the business cycle. The "consumer share" is defined as aggregate personal consumer spending as a percentage of national income. Inequality in the Golden Age has many features in common with inequality during the Age of Globalization. A fall in the employee share means an increase in inequality. A rise in the employee share means less inequality.
