Inequality, Financialization, and Political Disintegration

Alberto Russo

No 500, Working Papers from Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali

Abstract: Drawing on Peter Turchin's structural-demographic theory, this paper provides a preliminary examination of how rising inequality and financial liberalization contribute to political instability through the interplay of mass immiseration and elite overproduction. We capture these dynamics through a simplified agent-based macroeconomic model, introducing two structural shocks { growing inequality and financial liberalization { that reect the transformations reshaping advanced economies in recent decades, a process intertwined with political disintegration. A wealth tax on the richest households can reduce political fragmentation and improve economic performance, but lasting resilience will require embedding such measures within a broader rethinking of the policy paradigm that has prevailed since the 1980s.

Keywords: Inequality; Financial Liberalization; Political Instability; Agent-Based Model. (search for similar items in EconPapers)
JEL-codes: C63 D31 E02 (search for similar items in EconPapers)
Pages: 29
Date: 2025-10
New Economics Papers: this item is included in nep-cmp, nep-his, nep-hme, nep-mac and nep-pke
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Related works:
Working Paper: Inequality, financialization, and political disintegration (2025)
Working Paper: Inequality, financialization, and political disintegration (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wpaper:500

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