Modeling the Relationship of "Income Inequality - Economic Growth" by Using the Theory of Cascading Benefits

Blagun Ivan S. () and Dmitrishin Lesya I. ()
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Blagun Ivan S.: Precarpathian National University named after V. Stefanyk
Dmitrishin Lesya I.: Precarpathian National University named after V. Stefanyk

The Problems of Economy, 2012, issue 4, 216_221

Abstract: The relationship between income inequality and economic growth are considered in the context of the relative consumption of economic agents. A endogenous growth simple model is presented, in which agents have different initial levels of income and operating in accordance with cascading benefits, that compare their own consumption to the level of consumption of the next largest initial income of economic agents. Within this model, the impact of income inequality on economic growth depends on the form of the initial income distribution and how is social comparison.

Keywords: income distribution; income inequality; economic growth; the cascading benefits model; social comparison; social status (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:idp:redpoe:y:2012:i:4:p:216_221

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