SFB 303 Discussion Paper No. A - 561
Author: Corneo, Giacomo, and Olivier Jeanne
Title: Status, the Distribution of Wealth, and Growth
Abstract: We analyze a simple model of endogenous growth in which
individuals care about both consumption and their rank in the
distribution of wealth. We show that the steady-growth rate of the
economy increases with both the strength of the status-seeking motive
and the initial equality of the wealth distribution. Contrary to the
basic model of endogenous growth, the equilibrium growth rate is not
necessarily smaller than in the social optimum, and we identify the
circumstances under which the two coincide.
Keywords: endogenous growth, inequality, social status
JEL-Classification-Number: O40, O41
Creation-Date: October 1997
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