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Social Institutions and Economic Inequality: Modeling the Onset of the Kuznets Curve

Author

Listed:
  • Brais Alvarez-Pereira
  • Catherine S. E. Bale
  • Bernardo Alves Furtado
  • James E. Gentile
  • Claudius Gräbner
  • Heath Henderson
  • Francesca Lipari

Abstract

Theoretical models of the Kuznets Curve have been purely analytical with little contribution towards an understanding of the timing of the process and the presence of additional mechanisms affecting its timing. This paper proposes an agent-based version of Acemoglu and Robinson’s model of the Kuznets Curve. In extending their analytical framework we include heterogeneity of agents’ income and a mating mechanism that together represent elements of social mobility. These two simple changes proved to be enough to shed light on the length and timing before high inequality implies regime change. Thus, this work may contribute to an effective empirical assessment of the Kuznets curve as it explicitly considers the time dimension of the process and the effects of considering social dynamics.

Suggested Citation

  • Brais Alvarez-Pereira & Catherine S. E. Bale & Bernardo Alves Furtado & James E. Gentile & Claudius Gräbner & Heath Henderson & Francesca Lipari, 2015. "Social Institutions and Economic Inequality: Modeling the Onset of the Kuznets Curve," Discussion Papers 0204, Instituto de Pesquisa Econômica Aplicada - IPEA.
  • Handle: RePEc:ipe:ipetds:0204
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    1. repec:taf:fosoec:v:47:y:2018:i:1:p:32-63 is not listed on IDEAS
    2. Gräbner, Claudius, 2015. "Formal Approaches to Socio Economic Policy Analysis - Past and Perspectives," MPRA Paper 61348, University Library of Munich, Germany.

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