Purpose The Covid-19 pandemic has brought unprecedented stress to students and educational institutions across the world. We aimed to estimate the effect of the pandemic on the mental health of college students. Methods We used data on 419 first-year students (ages 18–20) at a large public university in North Carolina both before (October 2019-February 2020) and after (June/July 2020) the start of the Covid-19 pandemic. After evaluating descriptive data on mental health and stressors by students’ demographic characteristics, we estimated the associations between Covid-19 stressors (including work reductions, health, distanced learning difficulties and social isolation) and mental health symptoms and severity controlling for students’ pre-pandemic mental health, psychosocial resources, and demographic characteristics. Results We found that the prevalence of moderate-severe anxiety increased from 18.1% before the pandemic to 25.3% within four months after the pandemic began; and the prevalence of moderate-severe depression increased from 21.5% to 31.7%. White, female and sexual/gender minority (SGM) students were at highest risk of increases in anxiety symptoms. Non-Hispanic (NH) Black, female, and SGM students were at highest risk of increases in depression symptoms. General difficulties associated with distanced learning and social isolation contributed to the increases in both depression and anxiety symptoms. However, work reductions as well as Covid-19 diagnosis and hospitalization of oneself, family members or friends were not associated with increases in depression or anxiety symptoms. Conclusion Colleges may be able to reduce the mental health consequences of Covid-19 by investing in resources to reduce difficulties with distance learning and reduce social isolation during the pandemic.

We investigate how the reduction of income inequality through tax policy affects economic growth. Taxation at different points of the income distribution has heterogeneous impacts on households’ incentives to work, invest, and consume. Using US state‐level data and micro‐level household tax returns over the last three decades, we find that reducing income inequality between low and median income households improves economic growth. However, reducing income inequality through taxation between median and high‐income households reduces economic growth. These asymmetric economic growth effects are attributable both to supply‐side factors (i.e. changes in small business activity and labour supply) and to consumption demand.

We develop a tractable bubbles model with financial friction and downward wage rigidity. Competitive speculation in risky bubbles can result in excessive investment booms that precede inefficient busts, where post-bubble aggregate economic activities collapse below the pre-bubble trend. Risky bubbles can reduce ex ante social welfare, and leaning-against-the-bubble policies that balance the boom-bust trade-off can be warranted. We further show that the collapse of a bubble can push the economy into a “secular stagnation” equilibrium, where the zero lower bound and the nominal wage rigidity constraint bind, leading to a persistent recession, such as the Japanese “lost decades.” (JEL E22, E24, E32, E44, L26)

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