Ghiglino, Christian and Venditti, Alain (2011) Wealth distribution and output fluctuations. Journal of Economic Theory, 146 (6). pp. 2478-2509. DOI https://doi.org/10.1016/j.jet.2011.06.004
Ghiglino, Christian and Venditti, Alain (2011) Wealth distribution and output fluctuations. Journal of Economic Theory, 146 (6). pp. 2478-2509. DOI https://doi.org/10.1016/j.jet.2011.06.004
Ghiglino, Christian and Venditti, Alain (2011) Wealth distribution and output fluctuations. Journal of Economic Theory, 146 (6). pp. 2478-2509. DOI https://doi.org/10.1016/j.jet.2011.06.004
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: | Unnamed user with email elements@essex.ac.uk |
| Depositing User: | Unnamed user with email elements@essex.ac.uk |
| Date Deposited: | 06 Mar 2013 16:44 |
| Last Modified: | 04 Dec 2024 06:16 |
| URI: | http://repository.essex.ac.uk/id/eprint/5755 |