An agent-based model of trickle-up growth and income inequality

Elisa Palagi, Mauro Napoletano (), Andrea Roventini and Jean-Luc Gaffard
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Elisa Palagi: SSSUP - Scuola Universitaria Superiore Sant'Anna = Sant'Anna School of Advanced Studies [Pisa]
Mauro Napoletano: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: We build an agent-based model to study how coordination failures, credit constraints, and unequal access to investment opportunities affect inequality and aggregate income dynamics. We show that macroeconomic conditions are affected by income distribution and that the model features trickle-up growth dynamics. Redistribution toward poorer households raises demand and benefits all agents' income growth. Simulations show that our model reproduces several stylized facts concerning income inequality and social mobility. Finally, fiscal policies facilitating access to investment opportunities by poor households have the largest impact, raising income and decreasing inequality, with policy timing being crucial.

Date: 2023-12
New Economics Papers: this item is included in nep-cmp and nep-hme
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-04531031v1
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Published in Economic Modelling, 2023, 129, pp.106535. ⟨10.1016/j.econmod.2023.106535⟩

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Related works:
Journal Article: An agent-based model of trickle-up growth and income inequality (2023)
Working Paper: An agent-based model of trickle-up growth and income inequality (2023)
Working Paper: An agent-based model of trickle-up growth and income inequality (2022)
Working Paper: An agent-based model of trickle-up growth and income inequality (2022)
Working Paper: An Agent-based Model of Trickle-up Growth and Income Inequality (2021)
Working Paper: An agent-based model of trickle-up growth and income inequality (2021)
Working Paper: An agent-based model of trickle-up growth and income inequality (2021)
Working Paper: An agent-based model of trickle-up growth and income inequality (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04531031

DOI: 10.1016/j.econmod.2023.106535

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