Inequality, mobility and the financial accumulation process: a computational economic analysis

Yuri Biondi and Simone Righi

Journal of Economic Interaction and Coordination, 2019, vol. 14, issue 1, No 4, 93-119

Abstract: Abstract Our computational economic analysis investigates the relationship between inequality, mobility and the financial accumulation process. Extending the baseline model by Levy et al., we characterise the economic process through stylised return structures generating alternative evolutions of income and wealth through time. First, we explore the limited heuristic contribution of one and two-factors models comprising one single stock (capital wealth) and one single flow factor (labour) as pure drivers of income and wealth generation and allocation over time. Second, we introduce heuristic modes of taxation in line with the baseline approach. Our computational economic analysis corroborates that the financial accumulation process featuring compound returns plays a significant role as source of inequality, while institutional arrangements including taxation play a significant role in framing and shaping the aggregate economic process that evolves over socioeconomic space and time.

Keywords: Inequality; Economic process; Compound interest; Simple interest; Taxation; Computational economics (search for similar items in EconPapers)
JEL-codes: C46 C63 D31 D63 E02 E21 E27 H22 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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Working Paper: Inequality, mobility and the financial accumulation process: A computational economic analysis (2019)
Working Paper: Inequality, mobility and the financial accumulation process: A computational economic analysis (2015)
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DOI: 10.1007/s11403-019-00236-7

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