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Basic understanding of social inequality dynamics

Author

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  • Krawczyk, Jacek B
  • Townsend, Wilbur

Abstract

We provide an introduction to a model of social inequality dynamics. Because capital is distributed less equally than labour, we propose that that one of the main forces driving income inequality is the ratio of factor shares. In this paper we give an easy proof to show that this ratio is driven by the output elasticity of capital.

Suggested Citation

  • Krawczyk, Jacek B & Townsend, Wilbur, 2015. "Basic understanding of social inequality dynamics," Working Paper Series 19250, Victoria University of Wellington, School of Economics and Finance.
    • Handle: RePEc:vuw:vuwecf:19250
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    File URL: https://ir.wgtn.ac.nz/handle/123456789/19250
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    References listed on IDEAS

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    4. Judd, Kenneth L., 1985. "Redistributive taxation in a simple perfect foresight model," Journal of Public Economics, Elsevier, vol. 28(1), pages 59-83, October.
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