Nonetheless, the degree of concentration could be higher than we have seen in the past decade or more, which was a time of considerable stability for the Australian economy overall. We can’t know whether this scenario of higher but more variable income growth will come to pass. But if it did, how should we respond?
We could simply accept higher variability, if that comes, as the price of higher average income growth. That would see higher variability in demand in the economy, which would have its own implications, not least that it could make it harder for macroeconomic policies to foster stability.