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Why the rich become richer: insights from an agent-based model

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  • Saul Desiderio
  • Siyan Chen

Abstract

The aim of this paper is to investigate the reason why the rich get richer in an agent-based macroeconomic model. It shows that simulated top income and wealth follows a power law. From a dynamical point of view, it is found that revenues from financial investments are the key factor to sustaining wealth accumulation. In other words, wealth-dependent asymmetries among agents generates the power law tail.

Suggested Citation

  • Saul Desiderio & Siyan Chen, 2016. "Why the rich become richer: insights from an agent-based model," International Journal of Computational Economics and Econometrics, Inderscience Enterprises Ltd, vol. 6(3), pages 258-275.
    • Handle: RePEc:ids:ijcome:v:6:y:2016:i:3:p:258-275
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    Cited by:

    1. Chen, Siyan & Desiderio, Saul, 2020. "Job duration and inequality," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 14, pages 1-27.
    2. Chen, Siyan & Desiderio, Saul, 2018. "Computational evidence on the distributive properties of monetary policy," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-32.

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