Arbeitspapier
Making sense of Piketty's "fundamental laws" in a Post-Keynesian framework: The transitional dynamics of wealth inequality
If Piketty's main theoretical prediction (r>g leads to rising wealth inequality) is taken to its radical conclusion, then a small elite will own all wealth if capitalism is left to its own devices. We formulate and calibrate a Post-Keynesian model with an endogenous distribution of wealth between workers and capitalists which permits such a corner solution of all wealth held by capitalists. However, it also shows interior solutions with a stable, non-zero wealth share of workers, a stable wealth-to-income ratio, and a stable and positive gap between the profit and the growth rate determined by the Cambridge equation. More importantly, simulations show that the model conforms to Piketty's empirical findings during a transitional phase of increasing wealth inequality, which characterizes the current state of high-income countries: The wealth share of capitalists rises to over 60%, the wealth-to-income ratio increases, and income inequality rises. Finally, we show that the introduction of a wealth tax as suggested by Piketty could neutralize this rise in wealth concentration predicted by our model.
- Sprache
-
Englisch
- Erschienen in
-
Series: FMM Working Paper ; No. 35
- Klassifikation
-
Wirtschaft
Computational Techniques; Simulation Modeling
Personal Income, Wealth, and Their Distributions
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Macroeconomics: Consumption; Saving; Wealth
- Thema
-
Post-Keynesian
model
wealth
saving
inequality
Piketty
simulation
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Ederer, Stefan
Rehm, Miriam
- Ereignis
-
Veröffentlichung
- (wer)
-
Hans-Böckler-Stiftung, Macroeconomic Policy Institute (IMK), Forum for Macroeconomics and Macroeconomic Policies (FMM)
- (wo)
-
Düsseldorf
- (wann)
-
2018
- Handle
- Letzte Aktualisierung
- 10.03.2025, 11:41 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Ederer, Stefan
- Rehm, Miriam
- Hans-Böckler-Stiftung, Macroeconomic Policy Institute (IMK), Forum for Macroeconomics and Macroeconomic Policies (FMM)
Entstanden
- 2018
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