A Note on Income Inequality and Macro-economic Volatility
AbstractIncome inequality may influence macro-economic variables by affecting the money multiplier and the trade-off between inflation and output. In an AD-AS model with imperfect foresight income inequality intensifies the volatility of output and inflation rate by increasing the likelihood of oscillations as well as their magnitude. Volatility is, however, moderated when income inequality prolongs the business cycles.
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Bibliographic InfoPaper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp00-08.
Length: 9 pages
Date of creation: 2000
Date of revision:
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Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
Phone: +612 4221-3659
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Web page: http://business.uow.edu.au/econ/index.html
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Rational eating; cycles;
Other versions of this item:
- Levy, Amnon, 2002. "A Note on Income Inequality and Macro-economic Volatility," Australian Economic Papers, Wiley Blackwell, vol. 41(2), pages 233-38, June.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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