The Relation Between Economic Growth and Economic Equality

The Relation Between Economic Growth and Economic Equality
William Klein, Boston University
Date and time: Thu, Oct 30, 2014 - 11:21am
Refreshments at 11:06am
Location: LGRT 1033
Category: Condensed Matter Seminar
Abstract:

Economists and politicians often state that the way to alleviate poverty is to grow the economy. But recent events seem to show that growth itself may lead to an increase rather than a decrease in inequality. We set out to understand whether simple growth led to an increase or decrease in equality in simple models of the economy and what, if any, additional properties of the growth made a difference in the way that wealth was distributed. We used an agent based model ( The Asset Exchange Model) and studied the effect of multiplicative growth. We found that not only did the way growth was distributed play an important role in wealth distribution but we were able to connect the mode of distribution to both economic mobility and the applicability of equilibrium methods to study models of the economy.