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Wealth Distribution, Elasticity of Substitution, and Piketty: an anti-dual Pasinetti Economy

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  • Luca Zamparelli

    (Sapienza, University of Rome)

Abstract

This paper examines the evolution of wealth distribution between workers and capitalists. It shows that under competitive conditions, and when factors elasticity of substitution is high enough to ensure endogenous growth, capitalists' share of total wealth asymptotically tends to one if they have a higher propensity to save than workers. It is also shown that a tax on capital income shifts wealth distribution in workers' favor and makes any level of wealth concentration feasible.

Suggested Citation

  • Luca Zamparelli, 2015. "Wealth Distribution, Elasticity of Substitution, and Piketty: an anti-dual Pasinetti Economy," Working Papers 1/15, Sapienza University of Rome, DISS.
    • Handle: RePEc:saq:wpaper:01/15
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    Cited by:

    1. Sasaki, Hiroaki, 2021. "Automation Technology, Economic Growth, and Income Distribution in an Economy with Dynasties and Overlapping Generations," MPRA Paper 105446, University Library of Munich, Germany.
    2. Fischer, Thomas, 2017. "Thomas Piketty and the rate of time preference," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 111-133.
    3. Mattauch, Linus & Klenert, David & Stiglitz, Joseph E. & Edenhofer, Ottmar, 2022. "Overcoming wealth inequality by capital taxes that finance public investment," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 383-395.
    4. Hiroaki Sasaki, 2022. "Growth and income distribution in an economy with dynasties and overlapping generations," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 215-238, April.
    5. Baranzini, Mauro L. & Mirante, Amalia, 2021. "Pasinetti's theorem: A narrow escape, for what was to become an inexhaustible research programme," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 470-481.
    6. Mattauch, Linus & Klenert, David & Stiglitz, Joseph E. & Edenhofer, Ottmar, 2017. "Piketty meets Pasinetti: On public investment and intelligent machinery," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168156, Verein für Socialpolitik / German Economic Association.
    7. Sasaki, Hiroaki, 2018. "Capital Accumulation and the Rate of Profit in a Two-Class Economy with Optimization Behavior," MPRA Paper 88362, University Library of Munich, Germany.

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    More about this item

    Keywords

    Wealth distribution; elasticity of substitution; Pasinetti two-class equilibrium; Piketty;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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