Julia Tanndal: Inequality and International Finance

Julia Tanndal worked on two projects at Brown. First, she finished a paper estimating the impact of financial market deregulation on top income shares. Using the synthetic control method to investigate the two ‘Big Bangs’ of financial deregulation, the U.K. in 1986 and Japan in 1997–99, she and her co-author found that pre-tax top income shares increased after both deregulation episodes. In the case of the U.K., where they could look at microdata on wages, evidence shows that higher earnings among financial sector employees appeared to be an important channel for this result.

Her second, ongoing project examines global wealth and tax evasion. Somewhere between $5.6 and $7 trillion of the world's wealth was hidden in tax havens in 2007. She is currently using documents leaked from the Panamanian law firm Mossak Fonseca (known as the “Panama Papers”) to trace the networks formed by shell companies. This will show how assets are kept and to which degree of anonymity they are covered, and the number and type of inter-jurisdictional links within a single network. This has direct implications for the degree of international cooperation necessary to identify tax evasion or criminal activities. This will also increase the understanding of how wealth at the global top is managed.

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