"The self-appointed "Lead Independent Director of Finance Twitter" had a dark theory in the depths of the pandemic. In 2020, they asked the universe, "Why is no one talking about a K recovery?" since there was much discussion at that time about an economic bounceback in the shape of either a U, an L, or, most bullish of all, a V. "Some things will bounce back," Ivan wrote, "some will not recover. Think about it.""
"It bears similarities to another saying, invented nearly 200 years earlier by the great English romantic poet Percy Bysshe Shelley: "The rich get richer, the poor get poorer." This is also called "the Matthew effect," as some trace the sentiment all the way back to the bible's Book of Matthew 25:29: "For to everyone who has, more will be given, and he will have abundance; but from the one who does not have, even what he has will be taken away.""
An anonymous Twitter handle named "Ivan the K." proposed a K-shaped recovery during the pandemic, observing that some things would bounce back and others would not. Economists adopted the idea and linked it to the longstanding observation that the rich get richer while the poor get poorer, known as the Matthew effect. The divergence between productivity growth and median wage growth became pronounced starting in the Reagan era. Globalization, the decline of unions and manufacturing, and major tax reforms weakened labor's share of national income while boosting returns to capital. By 2025 both arms of the K had accelerated, driven by measurable surges in economic indicators.
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