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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 lights on growth, distribution and the relationships between the two, we develop a 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 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, we show that growth can be positively or negatively correlated with inequalities.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8670.

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Date of creation: Feb 2008
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Handle: RePEc:pra:mprapa:8670

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Keywords: social aspirations; ambition; inequality; growth;

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Citations

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

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