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Inequality, Financialization, and Political Disintegration

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  • Alberto Russo

    (Department of Economics and Social Sciences, Universita' Politecnica delle Marche)

Abstract

Drawing on Peter Turchin's structural-demographic theory, this paper provides a preliminary examination of how rising inequality and financial liberalization contribute to political instability through the interplay of mass immiseration and elite overproduction. We capture these dynamics through a simplified agent-based macroeconomic model, introducing two structural shocks { growing inequality and financial liberalization { that reect the transformations reshaping advanced economies in recent decades, a process intertwined with political disintegration. A wealth tax on the richest households can reduce political fragmentation and improve economic performance, but lasting resilience will require embedding such measures within a broader rethinking of the policy paradigm that has prevailed since the 1980s.

Suggested Citation

  • Alberto Russo, 2025. "Inequality, Financialization, and Political Disintegration," Working Papers 500, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    • Handle: RePEc:anc:wpaper:500
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    References listed on IDEAS

    as
    1. Michael Kumhof & Romain Rancière & Pablo Winant, 2015. "Inequality, Leverage, and Crises," American Economic Review, American Economic Association, vol. 105(3), pages 1217-1245, March.
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    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

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