Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/121750
Title: MOBILITY AND INEQUALITY OVER CYCLICAL ENDOGENOUS GROWTH
Authors: MUN LAI YOKE
Keywords: bequest, mobility, wealth distribution, endogenous cycles
Issue Date: 14-Aug-2015
Source: MUN LAI YOKE (2015-08-14). MOBILITY AND INEQUALITY OVER CYCLICAL ENDOGENOUS GROWTH. ScholarBank@NUS Repository.
Abstract: I analyze the effects of bequest motive, envy, preference for leisure, and monopoly power on intergenerational mobility, inequality, and growth-inequality trade-offs under a general equilibrium framework. First, I extend Matsuyama (1999) endogenous growth model by introducing idiosyncratic labor productivity shocks to households with bequest motives. Under i.i.d. shocks, the lineage wealth evolution and cross-sectional wealth distributions for Solow and Romer steady states, and period-2 cycles are identical, even though the aggregate growth rates are different. With lineage-correlated shocks, the cross-sectional inequality depends on the nature of the fixed points. Second, I introduce "Envy", as in Alvarez-Cuadrado and Long (2012), which reduces the normalized steady state capital stock, aggregate growth potential and lineage mobility. Third, I incorporate elastic labor, which increases mobility and inequality. Wage inequality is driven by substitution, wealth and general equilibrium effects. Last, I examine the distributive role of fiscal policies via inheritance tax and innovation subsidies.
URI: http://scholarbank.nus.edu.sg/handle/10635/121750
Appears in Collections:Ph.D Theses (Open)

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