Income and Wealth Distributions in a Neoclassical Growth Model with σ ≥ 1
Inequality, Taxation and Intergenerational Transmission
ISBN: 978-1-78756-458-9, eISBN: 978-1-78756-457-2
Publication date: 28 December 2018
Abstract
The publication of Capital in the Twenty-First Century by Piketty (2014) propelled the debate about the prospects of the evolution of income and wealth inequalities in this century. One of the main controversies is about the effects on the income and wealth inequalities of a decrease in the growth rate g. In Piketty (2014), it is claimed that a decrease in g will cause an increase in the wealth inequality, through an increase in the difference r−g, where r is the rate of return on capital. This claim was criticized by many authors. In this chapter, the author presents a neoclassical growth model with heterogeneous agents and uses it to shed more light on this issue. The author’s model generalizes and improves previous models introduced in Piketty and Zucman (2015) and in Aoki and Nirei (2016). The author also presents a result, relating income, wealth, and wage inequalities.
Keywords
Citation
Patrão, M. (2018), "Income and Wealth Distributions in a Neoclassical Growth Model with σ ≥ 1", Bishop, J.A. and Rodríguez, J.G. (Ed.) Inequality, Taxation and Intergenerational Transmission (Research on Economic Inequality, Vol. 26), Emerald Publishing Limited, Leeds, pp. 35-62. https://doi.org/10.1108/S1049-258520180000026004
Publisher
:Emerald Publishing Limited
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