Paul Krugman discusses the dynamics of wealth inequality in a recent blog: Notes on Piketty (Wonkish).... In it, he uses the standard Solow model to explain rising inequality. Although I do not have a formal model, my reading of a stock-flow consistent models implies that his analysis is not quite correct. The driving force behind wealth inequality is the differential in savings amongst households, and with a second order effect being that larger portfolios may have greater returns on their assets.Bond Economics
Inequality In Savings Drives Wealth Inequality
Brian Romanchuk
It's the distribution.
The problem is that the poor don't save enough to be part of the good rentier class? Ohh.
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