A Neoclassical Theory of Wealth Distribution

Ekkehart Schlicht

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: The linear savings function in Stiglitz' model of wealth distribution is replaced by the assumption that the average savings propensity of each individual is determined by its relative income position and the marginal propensity to save is an increasing function of individual income. It is shown that the model generates locally stable two-class equilibria under certain conditions which are analyzed carefully. In other words, Pasinetti-type class savings behaviour is explained endogeneously. A two-class property of nonstationary solutions is explained

Keywords: wealth distribution; income distribution; class formation; Pasinetti; classical savings function; relative income hypothesis (search for similar items in EconPapers)
Date: 1975
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Citations: View citations in EconPapers (26)

Published in Jahrbücher für Nationalökonomie und Statistik 1/2 189(1975): pp. 78-96

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Journal Article: A Neoclassical Theory of Wealth Distribution (1975)
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