However, there is no definitive research indicating that these income disparities show mixed results on the question of whether there are stable differences in the marginal propensity to consume across households with different incomes.2 More generally, the evidence is equivocal as to whether there is an empirical relationship between higher income inequality and reduced aggregate demand.
In the early 1990s, when central banks first began to take interest in them, experts told us that derivatives enabled risks to be unbundled and shifted at a low cost to those who were most willing and able to bear those risks.1 Given the diversity of risk preference among economic agents, the new distribution of risk after derivatives transactions was regarded as welfare enhancing.