FEBRUARY 2007
Extra Credit
Illustration by Stuart Bradford
Booming Economy Made the Rich Richer
U.S. income inequality rose rapidly from 1995 to 2000. In an analysis of Congressional Budget Office data, Stanford economist Victor Fuchs finds that changes in tax policy played a very small role. “The bullish stock market and the high-tech boom, with their associated options, bonuses, and capital gains highly concentrated among the top 1 percent of households, are probably the most important explanation,” he wrote. The decline in income, relative to the average, was rapid for households with children, he added. “This poses a daunting challenge to a society committed to equality of opportunity.” [Details]
Dangers of Mixing Foie Gras and Arugula
Innovators beware: “The early bird can get the worm but also be killed,” especially in industries like music, food, wine, and art, where critics enforce status quo standards, says Hayagreeva Rao, the Atholl McBean Professor of Organizational Behavior and Human Resources. He illustrates with a study of how top chefs finally forced Michelin Guide critics to accept “nouvelle cuisine” in France, but not without first punishing the innovating chefs with a downgrade in their ranking stars. [Details]
Looking for a Research Paper?
Many academic research papers may be accessed online through the Social Sciences Research Network (SSRN) as well as through the research papers link on the Stanford Business School webpage.
Useful addresses for finding research papers online:
Stanford GSB Research Papers database (includes title, author, and topic search options)—www.gsb.stanford.edu/researchpapers/
