Ghiglino, Christian and Venditti, Alain (2007) Wealth inequality, preference heterogeneity and macroeconomic volatility in two-sector economies. [["eprint_typename_scholarly-edition" not defined]]
Ghiglino, Christian and Venditti, Alain (2007) Wealth inequality, preference heterogeneity and macroeconomic volatility in two-sector economies. [["eprint_typename_scholarly-edition" not defined]]
Ghiglino, Christian and Venditti, Alain (2007) Wealth inequality, preference heterogeneity and macroeconomic volatility in two-sector economies. [["eprint_typename_scholarly-edition" not defined]]
Abstract
We explore the link between wealth inequality, preference heterogeneity and macroeconomic volatility in a two-sector neoclassical growth model. First we prove that, if agents have homogeneous preferences, when the absolute risk tolerance is a strictly convex (concave) function, sufficiently high (low) levels of wealth inequality may lead to endogenous fluctuations in the neighborhood of the steady state. Second, we consider the effects of preference heterogeneity when agents are homogeneous with respect to their wealth. We show that when the utility function belongs to the HARA class, sufficiently high levels of preference heterogeneity may lead to endogenous fluctuations in the neighborhood of the steady state if the elasticity of intertemporal substitution in consumption is greater than one. © 2006 Elsevier Inc. All rights reserved.
Item Type: | ["eprint_typename_scholarly-edition" not defined] |
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Additional Information: | View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00279997 |
Uncontrolled Keywords: | heterogeneity; income inequality; macroeconomic volatility; endogenous fluctuations |
Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 16 Jul 2012 20:24 |
Last Modified: | 30 Oct 2024 20:34 |
URI: | http://repository.essex.ac.uk/id/eprint/3007 |