A heterogeneous-agent model of growth and inequality for the UK- do planning and infrastructure matter? A supplementary note

A. Patrick Minford and Zheyi Zhu
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Zheyi Zhu: Cardiff Metropolitian University

No E2025/3, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: This paper builds on Yang et al (2021) which analysed the e¤ect of wealth inequality on UK economic growth in recent decades with a heterogeneous-agent growth model where agents can enhance individual productivity growth by undertaking entrepreneurship. In this supplementary note we examine whether ease of planning and infrastructure spending also contribute to productivity growth, as argued by some policymakers. The model is estimated and tested by indirect inference. The original model was not rejected in its match to the data behavioutr. We find the enhanced model contributes no improvement of the match. The model with only planning and infrastructure is strongly rejected.

Keywords: Heterogeneous-agent Model; Entrepreneurship; Growth; Inequality; Indirect Inference; planning; infrastructure (search for similar items in EconPapers)
JEL-codes: E10 O30 O40 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2025-07
New Economics Papers: this item is included in nep-ent and nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2025/13

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