A comment on “wealth inequality and endogenous growth” by Byoungchan Lee

Shijun Gu and Chengcheng Jia

Journal of Monetary Economics, 2023, vol. 133, issue C, 149-155

Abstract: How does wealth inequality affect economic growth? Byoungchan Lee answers this question by developing a heterogeneous-agent model and augmenting it with endogenous firm innovation. The novel channel is that rising wealth concentration reduces aggregate demand, which gives firms a disincentive to spend on R&D and therefore leads to slower productivity growth. In this discussion, we first explain the difference in calibration strategy between Lee’s approach and the common approach in the literature, and then discuss its quantitative implications for the effect of rising inequality on aggregate consumption.

Keywords: Heterogeneous-agent model; Wealth inequality; Aggregate consumption (search for similar items in EconPapers)
JEL-codes: D31 D52 E21 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304393222001386
Full text for ScienceDirect subscribers only

Related works:
Working Paper: A Comment on 'Wealth Inequality and Endogenous Growth' by Byoungchan Lee (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:133:y:2023:i:c:p:149-155

DOI: 10.1016/j.jmoneco.2022.11.006

Access Statistics for this article

Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().