Before the global financial crisis, income inequality was relegated to the underworld of economics. The motives of those who studied it were impugned. According to Martin Feldstein, the former head of Reagan’s Council of Economic Advisors, such people must have been motivated by envy. Robert Lucas, a Nobel prize winner, thought that “nothing [is] as poisonous” to sound economics as “to focus on questions of distribution.”
But amid bailouts, unemployment, and ever-fresh financial scandals among the top 1%, the issue of income inequality has seeped into the mainstream economics and become a legitimate subject of research.