A Neoclassical Theory of Wealth Distribution

by Ekkehart Schlicht

Jahrbücher für Nationalökonomie und Statistik 1975, 189(1/2), 78-96

Abstract

The linear savings function in Stiglitz' model of wealth distribution is replaced by the assumption that the average savings propensity of each individual is determined by its relative income position and the marginal propensity to save is an increasing function of individual income. It is shown that the model generates locally stable two-class equilibria under certain conditions which are analyzed carefully. In other words, Pasinetti-type class savings behaviour is explained endogeneously. A two-class property of nonstationary solutions is explained.

Keywords: wealth distribution, income distribution, class formation, Pasinetti, classical savings function, relative income hypothesis

Journal of Economic Literature classification numbers: D31, E13, E21, E25.



Professor Dr. Ekkehart Schlicht: Veröffentlichungen/Publications
 

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