Transitional Dynamics and the Distribution of Assets

Francesc Obiols-Homs () and Carlos Urrutia ()

Macroeconomics from University Library of Munich, Germany

Abstract: We study the evolution of the distribution of assets in a discrete time, de-terministic growth model with log-utility, a minimum consumption require-ment, Cobb-Douglas technology, and agents differing in initial assets. We prove that the coefficient of variation in assets across agents decreases mono-tonically in a transition to the steady state from below, if (i) the consumption requirement is zero, or (ii) the consumption requirement is not too big and the initial capital stock is large enough. We also show how a positive consumption requirement or a small elasticity of substitution between capital and labor can generate non-monotonic paths for inequality.

Keywords: Income distribution; Transitional Dynamics; Neoclassical Growth Model (search for similar items in EconPapers)
JEL-codes: D31 E21 O41 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2004-07-17
Note: Type of Document - pdf; pages: 25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Transitional dynamics and the distribution of assets (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0407020

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