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Conformism and Wealth Distribution

Author

Listed:
  • Kazuo MIno

    (Kyoto University)

  • Yasuhiro Nakamoto

    (Kyusyu Sangyo University)

Abstract

This paper explores the role of consumption externalities in a neoclassical growth model in which households have heterogeneous preferences. We fi?nd that the degree of conformism in consumption held by each household signifi?cantly affects the speed of convergence of the aggregate economy as well as the patterns of wealth distribution in the steady state equilibrium. In particular, a higher degree of consumption conformism accelerates the convergence speed of the economy towards the steady state. We also reveal that in an economy with a high degree of conformism, the pattern of initial distribution of wealth tends not to be sustained in the long run.

Suggested Citation

  • Kazuo MIno & Yasuhiro Nakamoto, 2014. "Conformism and Wealth Distribution," KIER Working Papers 901, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:901
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP901.pdf
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    More about this item

    Keywords

    consumption externalities; heterogeneous agents; wealth distribution;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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