The Paradox of Inequality

Oded Galor, Luca Pensieroso and Daniel C. Wainstock

No 13052, CESifo Working Paper Series from CESifo

Abstract: How could inequality between social classes have ever persisted during the Malthusian epoch, as affluence led to greater reproductive success, diluting inherited wealth and narrowing disparities over time? This paper uncovers the Paradox of Inequality, establishes its robust theoretical foundations, and provides its resolution. The analysis suggests that elites’ lavish, nonproductive displays of status inadvertently diverted resources from reproduction, limiting the dilution of inherited wealth and sustaining inequality across generations. Ironically, extravagance preserved the wealth it seemed to squander.

Keywords: inequality; Malthusian epoch; conspicuous consumption; fertility; paradox (search for similar items in EconPapers)
JEL-codes: O10 Z10 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_13052

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