A constraint on the dynamics of wealth concentration

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Tác giả: Valerio Astuti

Ngôn ngữ: eng

Ký hiệu phân loại: 339.2 Distribution of income and wealth

Thông tin xuất bản: 2022

Mô tả vật lý:

Bộ sưu tập: Metadata

ID: 194389

Comment: New sections addedIn the context of a large class of stochastic processes used to describe the dynamics of wealth growth, we prove a set of inequalities establishing necessary and sufficient conditions in order to avoid infinite wealth concentration. These inequalities generalize results previously found only in the context of particular models, or with more restrictive sets of hypotheses. In particular, we emphasize the role of the additive component of growth - usually representing labor incomes - in limiting the growth of inequality. Our main result is a proof that in an economy with random wealth growth, with returns non-negatively correlated with wealth, an average labor income growing at least proportionally to the average wealth is necessary to avoid a runaway concentration. One of the main advantages of this result with respect to the standard economics literature is the independence from the concept of an equilibrium wealth distribution, which does not always exist in random growth models. We analyze in this light three toy models, widely studied in the economics and econophysics literature.
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