IDEAS home Printed from https://ideas.repec.org/p/hal/spmain/hal-03643238.html
   My bibliography  Save this paper

Financial volatility and the evolution of wealth inequality in Europe: toward a typology of wealth inequality scenarios

Author

Listed:
  • Michel Forsé

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Mathieu Lizotte

Abstract

The study of wealth inequality poses some unique challenges that do not present themselves when studying income inequality. The main challenge is that the value of wealth is in constant flux and the net positive or negative variations across the different segments of the wealth distribution will have an impact on both wealth inequality and the welfare of households. While the volatility in financial markets is well known, its implications on wealth inequality deserve to be analyzed in greater detail. The objective of this study is to determine the consequences of financial volatility on both wealth inequality and household welfare in selected European countries. In order to properly grasp the impact of financial volatility on the distribution of wealth, we propose a typology of wealth inequality scenarios that incorporates changes in both relative wealth inequality and the absolute welfare of households. The scenario approach offers a synthetic way of understanding how the distribution of wealth changes over a given time period.

Suggested Citation

  • Michel Forsé & Mathieu Lizotte, 2019. "Financial volatility and the evolution of wealth inequality in Europe: toward a typology of wealth inequality scenarios," SciencePo Working papers Main hal-03643238, HAL.
    • Handle: RePEc:hal:spmain:hal-03643238
    DOI: 10.4000/ress.5630
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03643238
    as

    Download full text from publisher

    File URL: https://sciencespo.hal.science/hal-03643238/document
    Download Restriction: no
    File URL: https://libkey.io/10.4000/ress.5630?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. repec:hal:spmain:info:hdl:2441/67v5f41r0s8tmrcnuj225dpb7t is not listed on IDEAS
    2. Michel Forse & Alexandra Frenod & Maxime Parodi & Caroline Guibet Lafaye, 2018. "Pourquoi les inégalités de patrimoine sont-elles mieux tolérées que d'autres ?," Post-Print hal-03458231, HAL.
    3. Chen, Chau-Nan & Tsaur, Tien-Wang & Rhai, Tong-Shieng, 1982. "The Gini Coefficient and Negative Income," Oxford Economic Papers, Oxford University Press, vol. 34(3), pages 473-478, November.
    4. Brenda Spotton, 1997. "Financial Instability Reconsidered: Orthodox Theories versus Historical Facts," Journal of Economic Issues, Taylor & Francis Journals, vol. 31(1), pages 175-196, March.
    5. Berrebi, Z M & Silber, Jacques, 1985. "The Gini Coefficient and Negative Income: A Comment," Oxford Economic Papers, Oxford University Press, vol. 37(3), pages 525-526, September.
    6. Hyman P. Minsky, 1992. "The Financial Instability Hypothesis," Economics Working Paper Archive wp_74, Levy Economics Institute.
    7. Michel Forsé & Alexandra Frénod & Caroline Guibet Lafaye, 2018. "Pourquoi les inégalités de patrimoine sont-elles mieux tolérées que d’autres ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(2), pages 97-122.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michel Forsé & Mathieu Lizotte, 2019. "Financial volatility and the evolution of wealth inequality in Europe: toward a typology of wealth inequality scenarios," Post-Print hal-03643238, HAL.
    2. Emanuela Raffinetti & Elena Siletti & Achille Vernizzi, 2015. "On the Gini coefficient normalization when attributes with negative values are considered," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 24(3), pages 507-521, September.
    3. Laurent Piet & M Benoit & V Chatellier & K. Hervé Dakpo & N Delame & Yann Desjeux & P Dupraz & M Gillot & Philippe Jeanneaux & C Laroche-Dupraz & A Ridier & E Samson & P Veysset & P Avril & C Beaudoui, 2020. "Hétérogénéité, déterminants et trajectoires du revenu des agriculteurs français," Working Papers hal-02877320, HAL.
    4. Korb, Penelope J. & Blank, Steven C. & Erickson, Kenneth W., 2004. "Profit Patterns In The U.S. And The West, 1992 And 1997: What County-Level Data Reveal," 2004 Annual Meeting, June 30-July 2, 2004, Honolulu, Hawaii 36253, Western Agricultural Economics Association.
    5. Claudio Zoli, 2012. "Characterizing Inequality Equivalence Criteria," Working Papers 32/2012, University of Verona, Department of Economics.
    6. Siraj G. Bawa & James M. Williamson, 2020. "Distributional Impacts of the Tax Cuts and Jobs Act Using Farm Household Microdata," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 835-855, December.
    7. Acedański, Jan, 2017. "Heterogeneous expectations and the distribution of wealth," Journal of Macroeconomics, Elsevier, vol. 53(C), pages 162-175.
    8. El-Osta, Hisham S. & Bernat, G. Andrew, Jr. & Ahearn, Mary Clare, 1995. "Regional Differences In The Contribution Of Off-Farm Work To Income Inequality," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(1), pages 1-14, April.
    9. Mishra, Ashok & El-Osta, Hisham & Gillespie, Jeffrey M., 2009. "Effect of agricultural policy on regional income inequality among farm households," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 325-340, May.
    10. Sanjoy Chakravorty & S. Chandrasekhar & Karthikeya Naraparaju, 2019. "Land Distribution, Income Generation and Inequality in India's Agricultural Sector," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(S1), pages 182-203, November.
    11. Sahrbacher, Amanda, 2012. "Impacts of CAP reforms on farm structures and performance disparities: An agent-based approach," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 65, number 65.
    12. J. M. Applegate & Marco A. Janssen, 2022. "Job Mobility and Wealth Inequality," Computational Economics, Springer;Society for Computational Economics, vol. 59(1), pages 1-25, January.
    13. Frank A. Cowell & Philippe Kerm, 2015. "Wealth Inequality: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 671-710, September.
    14. Lou, Youcheng & Strub, Moris S. & Li, Duan & Wang, Shouyang, 2021. "The impact of a reference point determined by social comparison on wealth growth and inequality," Journal of Economic Dynamics and Control, Elsevier, vol. 127(C).
    15. Peter Lindner, 2015. "Factor decomposition of the wealth distribution in the euro area," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(2), pages 291-322, May.
    16. Ahearn, Mary C. & Perry, Janet E. & El-Osta, Hisham S., 1993. "The Economic Well-Being of Farm Operator Households, 1988-90," Agricultural Economic Reports 308266, United States Department of Agriculture, Economic Research Service.
    17. Antonio Abatemarco & Massimo Aria & Sergio Beraldo & Michela Collaro, 2023. "Measuring Access and Inequality of Access to Health Care: a Policy-Oriented Decomposition," CSEF Working Papers 666, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    18. Xiaofeng Lv & Gupeng Zhang & Guangyu Ren, 2017. "Gini index estimation for lifetime data," Lifetime Data Analysis: An International Journal Devoted to Statistical Methods and Applications for Time-to-Event Data, Springer, vol. 23(2), pages 275-304, April.
    19. Nkonya, Ephraim & Phillip, Dayo & Mogues, Tewodaj & Pender, John & Yahaya, Muhammed Kuta & Adebowale, Gbenga & Arokoyo, Tunji & Kato, Edward, 2008. "From the ground up: Impacts of a pro-poor community-driven development project in Nigeria," IFPRI discussion papers 756, International Food Policy Research Institute (IFPRI).
    20. Nkonya, Ephraim & Phillip, Dayo & Mogues, Tewodaj & Pender, John & Kato, Edward, 2012. "Impacts of Community-driven Development Programs on Income and Asset Acquisition in Africa: The Case of Nigeria," World Development, Elsevier, vol. 40(9), pages 1824-1838.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:spmain:hal-03643238. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Contact - Sciences Po Departement of Economics (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.