Status-seeking behavior, the evolution of income inequality, and growth
نویسندگان
چکیده
Using an overlapping generations model, this paper investigates the implications of status-seeking behavior, induced by preferences for relative income, for the evolution of income inequality. When average income rises, an individual’s marginal utility of their own income may increase (keeping up with the Joneses, or KUJ), or decrease (running away from the Joneses, or RAJ). It is shown that income inequality is shrinking over time in the KUJ economy, whereas it is expanding in the RAJ economy. We also explore the implications for long-run growth and inequality, in the existence of both KUJ and RAJ agents.
منابع مشابه
On the Inequality Effects of Fiscal Policy
increasing concern with income distribution effects rather than growth effects of government activities has prompted numerous incidence analysis of government tax and expenditure behavior, in this paper, the extent of government contributions to changes in income inequality is analyzed for the Iranian economy. Some major findings of this research is that income distribution in urban areas was m...
متن کاملچشمانداز آینده بخش توزیع درآمد و سیاستهای لازم برای بهبود آن
This research aims at studying challenges, difficulties and prospects of Irans income distribution sector during 2005-2015 by means of an econometric model. The first part of the paper reviews some theories and empirical accomplishments regarding income distribution in national and international levels. The next part of the paper goes through the trends of income distribution and social welfare...
متن کاملThe effect of wage growth caused by stock market liquidity on income inequality and poverty in developed and developed countries
One of the significant incentives of the investors to enter the capital market is to earn profits and finally increase wealth. However, one of the most important concerns of the investors while investing in the stock market is the liquidity of the stocks. Thus, the high liquidity of the stock market reduces the risk of non-liquidity of the stock, as well as reduces the cost of capital accumulat...
متن کاملAnalyzing the Causal Relationships between Economic Growth, Income Inequality, and Transmission Channels: New Empirical Evidences from Iran
This paper investigates causal relations between economic growth, income inequality, and transmission channels during the period 1972 to 2016. These channels include saving rate, investment rate, redistribution policies, human capital, and conspicuous consumption. There is no strong evidence that supports uni-directional or bi-directional causality. In addition, some of the transmission channel...
متن کاملInclusive Growth in Iran's Provinces (2004 -2015)
This paper aims to focus on inclusive growth and its impact on multidimensional poverty and inequality in Iran's provinces on the basis of social mobility index. The results suggest, that although the multi-dimensional poverty has decreased, participation of active labor force has a decisive role in inclusive growth and reduction of absolute multi-dimensional poverty of the provinces. But l...
متن کامل