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Effects of Wealth Inequality and Segregation on Economic Growth: An Interpretation via Luxury Asset Holdings

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  • Laura Policardo
  • Edgar J. Sanchez Carrera

Abstract

The lack of data has challenged the study of the effect of wealth inequality on economic growth despite it being at the core of the international debate. Scholars have not found a unanimous effect of wealth inequality on economic growth for the last few years. In this paper, we provide a possible explanation of why wealth inequality might have a different effect on growth in different countries. So, we claim that a possible reason for such different effects could be the different socio-economic structure of the population and, more precisely, the level of economic segregation. We prove this effect with numerical simulations calibrated on accurate data.

Suggested Citation

  • Laura Policardo & Edgar J. Sanchez Carrera, 2024. "Effects of Wealth Inequality and Segregation on Economic Growth: An Interpretation via Luxury Asset Holdings," Working Papers - Economics wp2024_09.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2024_09.rdf
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    More about this item

    Keywords

    Economic Growth; Wealth Inequality; Luxury Non-productive Assets; United States; France; Residential Segregation.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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