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Income Distribution and the Demand Constraint
This paper argues that the interaction between inequality and the demand patterns for goods is a potential source of persistent inequality. Income distribution, in the presence of non-homothetic preferences, affects the demand for goods and, due to differences in factor intensities across sectors, i...
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| Published in: | Journal of economic growth (Boston, Mass.) Mass.), 2001-06, Vol.6 (2), p.107-133 |
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| Main Author: | |
| Format: | Article |
| Language: | English |
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| Citations: | Items that cite this one |
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| cited_by | cdi_FETCH-LOGICAL-c376t-3d86d7287d7128ad747644bae6f2787f77db0c20d63331f8d4e29c6082653103 |
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| container_end_page | 133 |
| container_issue | 2 |
| container_start_page | 107 |
| container_title | Journal of economic growth (Boston, Mass.) |
| container_volume | 6 |
| creator | Mani, Anandi |
| description | This paper argues that the interaction between inequality and the demand patterns for goods is a potential source of persistent inequality. Income distribution, in the presence of non-homothetic preferences, affects the demand for goods and, due to differences in factor intensities across sectors, it alters the return to factors of production and the initial distribution of income. Low inequality leads to high demand for medium skilled intensive goods, providing a bridge over which low skill dynasties may transition to the high-skilled sector in the long run. Under high inequality however, the initial lack of demand for medium skilled labor breaches this bridge from poverty to prosperity and inequality persists. |
| doi_str_mv | 10.1023/a:1011326523470 |
| format | article |
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| fulltext | fulltext |
| identifier | ISSN: 1381-4338 |
| ispartof | Journal of economic growth (Boston, Mass.), 2001-06, Vol.6 (2), p.107-133 |
| issn | 1381-4338 1573-7020 |
| language | eng |
| recordid | cdi_proquest_journals_197645233 |
| source | International Bibliography of the Social Sciences (IBSS); ABI/INFORM Global; Springer Link; JSTOR Archival Journals |
| subjects | Bequests Capital investments Capital markets Consumption Demand Economic growth Economic models Economic theory Economics Higher education Human capital Income distribution Income inequality Income level Investments Labor demand Labor supply Low income groups Middle class Per capita Poverty Preferences Prosperity Skills Steady state economies Studies Wages |
| title | Income Distribution and the Demand Constraint |
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