Related papers: When does inequality freeze an economy?

For centuries, national economies created wealth by engaging in international trade and production. The resulting international supply networks not only increase wealth for countries, but also create systemic risk: economic shocks,…

We investigate the effects of wariness (defined as individuals' concern for their minimum utility over time) on poverty traps and equilibrium multiplicity in an overlapping generations (OLG) model. We explore conditions under which (i)…

Using a model based on generalised Lotka Volterra dynamics together with some recent results for the solution of generalised Langevin equations, we show that the equilibrium solution for the probability distribution of wealth has two…

We study the effects of introducing information inefficiency in a model for a random linear economy with a representative consumer. This is done by considering statistical, instead of classical, economic general equilibria. Employing two…

By borrowing methods from complex system analysis, in this paper we analyze the features of the complex relationship that links the development and the industrialization of a country to economic inequality. In order to do this, we identify…

This study examines the relationship between automation and income inequality across different countries, taking into account the varying levels of technological adoption and labor market institutions. The research employs a panel data…

Crime is an economically important activity, sometimes called the industry of crime. It may represent a mechanism of wealth distribution but also a social and economic charge because of the cost of the law enforcement system. Sometimes it…

Behavioural economists have shown that people are often averse to inequality and will make choices to avoid unequal outcomes. In this paper, we consider how to allocate indivisible goods fairly so as to minimize inequality. We consider how…

The prevalence of wealth inequality propels us to characterize its origin and progression, via empirical and theoretical studies. The Yard-Sale(YS) model, in which a portion of the smaller wealth is transferred between two individuals,…

Under conditions of market equilibrium, the distribution of capital income follows a Pareto power law, with an exponent that characterizes the given equilibrium. Here, a simple taxation scheme is proposed such that the post-tax capital…

We analyze the ideal gas like models of markets and review the different cases where a `savings' factor changes the nature and shape of the distribution of wealth. These models can produce similar distribution of wealth as observed across…

We study a risk-sharing economy where an arbitrary number of heterogenous agents trades an arbitrary number of risky assets subject to quadratic transaction costs. For linear state dynamics, the forward-backward stochastic differential…

Thomas Piketty's Capital in the Twenty-First Century puts forth a logically consistent explanation for changes in income and wealth inequality patterns. However, while rich in data, the book provides no formal empirical testing for its…

Various formulations of counterfactual general equilibrium in economies -- systems of actors manipulating economic goods -- are logically and mathematically analyzed. Evenly-rotating economies are systems whose evolution is stable, steady,…

We study the impact of economic integration on agglomeration in a model where all consumers are inter-regionally mobile and have heterogeneous preferences regarding their residential location choices. This heterogeneity is the unique…

Simple agent based exchange models are a commonplace in the study of wealth distribution in an artificial economy. Generally, in a system that is composed of many agents characterized by their wealth and risk-aversion factor, two agents are…

We analyze inequality aspects of the agent-based model of capitalist economy named it Social Architecture of Capitalism that has been introduced by Ian Wright. The model contemplates two main types of agents, workers and capitalists, which…

The analysis of income and wealth inequality is often constrained by the lack of reliable data. In this work, we introduce a proxy-based approach in which sports performance data are used to mimic economic distributions. In particular, the…

This paper studies politically feasible policy solutions to inequities in local public goods provision. I focus in particular on the entwined issues of high property taxes, geographic income disparities, and inequalities in public education…

Microscopic models describing a whole of economic interactions in a closed society are considered. The presence of a tax system combined with a redistribution process is taken into account, as well as the occurrence of tax evasion. In…