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Journal Publication

The American Dream Is Alive and Well (and the Problem of US Inequality Greatly Exaggerated)

Journal of Applied Corporate Finance

May 13, 2024

Don’t listen to the populist naysayers: The U.S. economy continues to deliver jobs, higher wages and upward mobility for those who need it most.

What do former President Trump and Bernie Sanders have in common? Or Fox News host Tucker Carlson, Nobel Prize-winning Clinton administration economist Joseph Stiglitz and billionaire investor Ray Dalio? Among many other prominent elected officials, commentators, public intellectuals, and business leaders, they have all voiced concern about the death of the American Dream.

And they’re hardly alone. Concern about the decline of the American Dream is widespread and has been heavily influenced by the rise of populism. Frustration with “elites” has saturated the public debate. The game is rigged, we often hear, for everyone except those at the top. Wages and incomes have been stagnant for decades, we are told. The middle class has been permanently weakened. America is no longer an upwardly mobile society. Capitalism is broken.

But there’s a problem with this narrative: It is wrong on the facts. The American Dream is alive and well.

Click here to access the published version of the paper.

Click here to read the working paper version.