Increasing Inequality and Financial Fragility in an An Agent Based Macroeconomic Model

The aim of this paper is to investigate the relationship between increasing inequality and financial fragility in an agent based macroeconomic model. We analyse the effects of a non-linear relationship between wealth and consumption on the evolution of the economic system. Preliminary results show that more inequality rises macroeconomic volatility, increasing the likelihood of observing large unemployment crises.

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Year of publication:	2013-06
Authors:	Russo, Alberto ; Riccetti, Luca ; Gallegati, Mauro
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	agent-based model \| business cycle \| inequality \| crisis

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	C63 - Computational Techniques ; D31 - Personal Income, Wealth and Their Distributions ; E21 - Consumption; Saving ; E32 - Business Fluctuations; Cycles
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011114106