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Will wealth become more concentrated in Europe?

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  • Stefan Ederer
  • Miriam Rehm

Abstract

We develop and calibrate an analytical growth model in the neo-Kaleckian tradition with an endogenous wealth distribution and differential returns to wealth between workers and capitalists. We show that a long-run equilibrium allows for non-zero wealth owned by workers, even as the model contains the ?triumph of the rentier? predicted by Piketty?s r > g as a special case. The model?s calibration to ten European countries shows that the distribution of wealth is likely to become more unequal in all cases, barring political countermeasures.

Suggested Citation

  • Stefan Ederer & Miriam Rehm, 2017. "Will wealth become more concentrated in Europe?," FMM Working Paper 13-2017, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    • Handle: RePEc:imk:fmmpap:13-2017
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    References listed on IDEAS

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    1. Ozlem Onaran & Thomas Obst, 2016. "Wage-led growth in the EU15 member-states: the effects of income distribution on growth, investment, trade balance and inflation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(6), pages 1517-1551.
    2. Emmanuel Saez & Gabriel Zucman, 2014. "Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," NBER Working Papers 20625, National Bureau of Economic Research, Inc.
    3. Laura Carvalho & Armon Rezai, 2016. "Personal income inequality and aggregate demand," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(2), pages 491-505.
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