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Stefan Ederer, Miriam Rehm
Will wealth become more concentrated in Europe? Evidence from a calibrated neo-Kaleckian model
We develop and calibrate an analytical growth model in the neo-Kaleckian tradition with an endogenous wealth distribution and differential returns to wealth between workers and capitalists. We show that a long-run equilibrium allows for non-zero wealth owned by workers, even as the model contains the "triumph of the rentier" predicted by Piketty's r > g as a special case. The model's calibration to ten European countries shows that the distribution of wealth is likely to become more unequal in all cases, barring political countermeasures.
JEL-Codes:D31, E12, E21
Keywords:inequality, wealth, income, neo-Kaleckian theory, model calibration
Research group:Macroeconomics and European Economic Policy