Modelling the overall personal income distribution in the USA from 1994 to 2002
AbstractNumerical modelling of the personal income distribution (PID) in the USA from 1950 to 2003 is accomplished based on a microeconomic model for the personal income evolution. It is shown that the overall PID demonstrates the existence of some fixed hierarchical income distribution structure in the USA. The PIDs normalized to the total population and corrected for the per capita nominal GDP growth coincide for years from 1994 to 2002. The observed inflation plays a role of some specific mechanism returning the PIDs to the initial shape. The structure of the PID is accurately simulated by using a microeconomic model with some simple assumptions related to the distribution of capabilities to earn money and sizes of earning means – two measurable parameters introduced in the model. The evolution of the overall PID is also well predicted depending on nominal GDP growth from 1994 to 2002.
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Bibliographic InfoPaper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 07.
Length: 24 pages
Date of creation: Nov 2005
Date of revision:
personal income distribution; mean income; microeconomic modeling; USA; real GDP; macroeconomics;
Find related papers by JEL classification:
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
- J1 - Labor and Demographic Economics - - Demographic Economics
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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