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Wealth distribution and output fluctuations

Ghiglino, Christian and Venditti, Alain (2011) 'Wealth distribution and output fluctuations.' Journal of Economic Theory, 146 (6). pp. 2478-2509. ISSN 0022-0531

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Abstract

We explore the link between wealth inequality and output fluctuations in a general two-sector neoclassical growth model with endogenous labor and heterogeneous agents. When agents have homogeneous CRRA preferences and individual wealth is Pareto distributed, a sufficiently large rise in the Gini index typically leads to an increase in endogenous fluctuations of output. For general economies, we show that under plausible conditions on the fundamentals, wealth inequality is still a destabilizing factor. © 2011 Elsevier Inc.

Item Type: Article
Uncontrolled Keywords: Wealth inequality; Pareto distribution; Gini index; Elastic labor supply; Endogenous equilibrium business cycles
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 06 Mar 2013 16:44
Last Modified: 15 Jan 2022 00:26
URI: http://repository.essex.ac.uk/id/eprint/5755

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