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Dynamics of income distribution

  • Hongyi Li
  • Danyang Xie
  • Heng-Fu Zou

In this paper, we have obtained closed-form solutions in Cass-Koopmans growth models with heterogeneous agents. The relationship between the form of the production function and the dynamics of income distribution is made explicit. We then use this relationship to determine what production structure is simultaneously consistent with facts on growth and income inequality. Our empirical findings give support to models with decreasing returns in the reproducible factor.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 33 (2000)
Issue (Month): 4 (November)
Pages: 937-961

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Handle: RePEc:cje:issued:v:33:y:2000:i:4:p:937-961
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