I studied a fair bit of economics history though. Back in the day there was a lot less math and a lot more explanation. (This is around the 1920s-1940s.)
Now, of course, with all these articles looking like mathematical gobbledy-gook and the greater resources that economics departments have, with all these pretensions to being akin to the objective natural sciences, you'd think that the mainstream liberal brand of economics would have had far greater success in managing our economies and predicting and avoiding crises.
World economic crises have become bigger and badder since 1980, precisely when all the "distortions" of "discredited" Keynesian economics was dust-binned and was replaced by neo-liberalism, both in the academy and among policy-makers.
This is because neo-liberal economics primary utility is in rationalizing a system of wealth distribution that rewards capital and suppresses labour. It isn't about identifying the one-best policy. If it was, the economic course pursued for the past three decades would have been abandoned as self-evidently failing in the 1990s, and as inarguably failed with the present massive world crisis.
But being totally discredited is nothing serious to these people. It seems that only when the capitalist class is being eaten alive by their hunger-crazed victims (the rest of humanity) with all of civilization, including [most importantly!] their own palaces and treasures lying in ruins around them, and neo-liberal economists have been lynched and burned alive, that they'll consider the possibility that a paradigm-shift is occurring, and that there might have been some flaws in their underlying assumptions. For the present time, it's a better career choice to be a liberal economist than to be an auto-worker or an administrative clerk, so all is right with the world AND with their theories.
And that explains stuff like this: "Can demographics explain why the income shares of high earners have increased?"
There's been a massive shift of wealth from the poorest 80% to the wealthiest 20%, with the top 5% enjoying the lion's share of the gains. The middle class is shrinking. Billionaire investor Warren Buffet says that there's been a class war going on in the USA and that his side is winning.
But what does he know? He's just a billionaire investor who doesn't have a clue how the real world works. The last thing we want to do is talk about stuff like "class war" when, with the magic of bullshit neo-liberal economics we can drain all the blood out of a topic and attribute things to random forces that nobody in particular can be blamed for:
The two points I'm mashing together are the following:
1) The hypothesis that the sharp rise in executive compensation was driven by an equally sharp rise in firm values. This study (pdf) concludes that "[t]he sixfold increase of CEO pay between 1980 and 2003 can be fully attributed to the six-fold increase in market capitalization of large US companies during that period." According to this story, the increase in high-earner wages isn't a problem that needs solving: CEOs are being paid their marginal product.
2) The hypothesis that the sharp rise in equity prices was driven by demographics. The story we'd tell here is that as the leading edge of the baby boom reached the age of 40 or so, the demand for financial assets increased, driving up firm values. (See here for a theoretical model that develops the point.) The timing certainly fits: the rise in asset prices began in 1985.
So the claim is that demographic pressures are behind the underlying cause of the increasing concentration of income in the right-hand tail of the income distribution. Clearly, the timing fits this story. The beginning of both the asset price boom and the trend to higher top-end salaries occurred when baby boomers started saving/investing.
As far as policy goes, this is very much a story in which those high executive salaries are best thought of as rents: those CEOs just happened to be at the right place at the right time.
So, there's been no weakening of the labour movement. No union-busting. There's been no destruction of unionized jobs through automation, globalization, lay-offs and speed-ups. There's been no shrinking of the welfare state under various pretexts. There's been no income tax-cuts that mainly benefited the wealthiest, while payroll taxes, property taxes, consumption taxes and user-fees, primarily affecting average people, haven't been increased. The world's financial markets haven't become increasingly de-regulated, allowing for massive gambling profits for the few, along with increasingly frequent panics, meltdowns, and bail-outs (paid for by the unprivileged many).
Nope. None of that.
Share prices just increased because the baby-boomers started saving for their retirement.
It turns out that WE are the "greedy capitalist" we've been running from.