Wealth inequality and dynamic stability |
| |
Authors: | Christian Ghiglino |
| |
Institution: | a Department of Economics, Queen Mary, University of London, Mile End Road, London E1 4NS, UK b Department of Economics, University of Bern, Gesellschaftsstrasse 49, 3012 Bern, Switzerland |
| |
Abstract: | We explore the link between wealth inequality and stability in a two-sector neoclassical growth model with heterogeneous agents. We show that when the inverse of absolute risk aversion (or risk tolerance) is a strictly convex function, wealth inequality is a factor that favors instability. In the opposite case, inequality favors stability. Our characterization also shows that whenever absolute risk tolerance is linear, as when preferences exhibit hyperbolic absolute risk aversion (HARA), wealth heterogeneity is neutral. |
| |
Keywords: | D30 D50 D90 O41 |
本文献已被 ScienceDirect 等数据库收录! |
|