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A heterogeneous-agent model of growth and inequality for the UK- do planning and infrastructure matter? A supplementary note

Author

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  • Minford, Patrick

    (Cardiff Business School)

  • Zhu, Zheyi

    (Cardiff Metropolitian University)

Abstract

This paper builds on Yang et al (2021) which analysed the e¤ect of wealth inequality on UK economic growth in recent decades with a heterogeneous-agent growth model where agents can enhance individual productivity growth by undertaking entrepreneurship. In this supplementary note we examine whether ease of planning and infrastructure spending also contribute to productivity growth, as argued by some policymakers. The model is estimated and tested by indirect inference. The original model was not rejected in its match to the data behavioutr. We find the enhanced model contributes no improvement of the match. The model with only planning and infrastructure is strongly rejected.

Suggested Citation

  • Minford, Patrick & Zhu, Zheyi, 2025. "A heterogeneous-agent model of growth and inequality for the UK- do planning and infrastructure matter? A supplementary note," Cardiff Economics Working Papers E2025/3, Cardiff University, Cardiff Business School, Economics Section.
    • Handle: RePEc:cdf:wpaper:2025/13
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    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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