Social mobility and endogenous cycles in redistribution
AbstractBy allowing median voterÂ’s location and preferred policy to change over time, a variety of redistributive policies results in the long-run with no unique relationship to inequality. Single outcome depends on the interaction between the pure economic structure and policy action in determining wealth distribution over time. The standard positive correlation between redistribution and inequality is confirmed when the pattern of social mobility, potentially prevailing in a free market, proves robust to public action. Otherwise the non-linear relationship found in recent literature is confirmed. With balanced intensity of backward and upward mobility in free market, policy cycles endogenously arise, with inequality shrinking and enlarging periodically and counter-cyclically.
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 505.
Date of creation: Jul 2004
Date of revision:
social mobility; political cycle; credit rationing; redistributive policy;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-24 (All new papers)
- NEP-MAC-2006-01-24 (Macroeconomics)
- NEP-POL-2006-01-24 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Guerino Ardizzi, 2003. "Cost efficiency in the retail payment networks: first evidence from the Italian credit card system," Temi di discussione (Economic working papers) 480, Bank of Italy, Economic Research and International Relations Area.
- Fabrizio Balassone & Maura Francese, 2004. "Cyclical asymmetry in fiscal policy, debt accumulation and the Treaty of Maastricht," Temi di discussione (Economic working papers) 531, Bank of Italy, Economic Research and International Relations Area.
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