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Gain versus pain from status and ambition: Effects on growth and inequality

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  • Tournemaine, Frederic
  • Tsoukis, Christopher

Abstract

To shed light on growth, distribution and the relationship between the two, we develop an endogenous growth model with heterogeneous individuals who care about social status. Individuals' heterogeneity stems from two sources: their innate skills and their degree of ambition. While the willingness of individuals to accumulate wealth depends on whether they experience gain or pain from loss of status, we show that ambition of individuals plays an important role regarding growth and distribution: ambition can inhibit or foster accumulation of wealth, then in turn growth. In such a context, though we show that growth can be positively or negatively correlated with inequality, the case of a positive correlation between the two appears to be the most plausible.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 39 (2010)
Issue (Month): 2 (April)
Pages: 286-294

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Handle: RePEc:eee:soceco:v:39:y:2010:i:2:p:286-294

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Web page: http://www.elsevier.com/locate/inca/620175

Related research

Keywords: Social aspirations Ambition Inequality Economic behaviour Growth;

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References

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Citations

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Cited by:
  1. Phu Nguyen-Van & Thi Kim Cuong Pham, 2008. "Endogenous Fiscal Policies, Environmental Quality, and Status-Seeking Behavior," Working Papers 29, Development and Policies Research Center (DEPOCEN), Vietnam.
  2. Christopher Tsoukis & Frédéric Tournemaine, 2013. "Status In A Canonical Macro Model: Labour Supply, Growth And Inequality," Manchester School, University of Manchester, vol. 81, pages 65-92, October.
  3. Frederic Tournemaine & Christopher Tsoukis, 2010. "Status, Fertility, Growth And The Great Transition," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(03), pages 553-574.
  4. Tournemaine, frederic & Tsoukis, Chris, 2008. "Status, endogenous reference standards, and the growth-inequality relation: A note," MPRA Paper 10420, University Library of Munich, Germany.

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