This paper studies two formal models of long run growth with a medium-run distributive cycle, both of which feature causal links from the rise in inequality to a deterioration of long run macroeconomic performance. Both versions feature an endogenous income-capital ratio: one through the...

The Goodwin (1967) model of the growth cycle assigns distributional conflict a central role in the dynamics of capital accumulation, but is silent on the determinants of technical change. Following Shah and Desai (1981), previous studies focused on the effects of the direction, or bias of...

We study a demand-driven growth and distribution model with a public sector, both without and with government debt. Government spending is used to finance the accumulation of public capital and to pay wages to public employees. The interaction between public capital and induced technical change...

The literature shows that when a society believes that wealth is determined by random “luck” rather than by merit, it demands more redistribution. Adverse shocks, like earthquakes, strengthen the belief that random “bad luck” can frustrate the outcomes achieved with merit. We...

We illustrate how the desire to live in a fair society that rewards individual effort and hard work triggers an unselfish though rational demand for redistribution. This leads the well off to prefer higher taxes and the poor to reject extreme progressivity. We then provide evidence of these...

In this paper we set up a baseline, but nevertheless advanced and complete model representing detailed goods market dynamics, heterogeneous labor markets, dual and cross-dual wage-price adjustment processes, as well as counter-cyclical government policies. The cyclical movements of output...

Following a methodology proposed by Jantzen and Volpert (2012), we use IRS Adjusted Gross Income (AGI) data for the United States (1921-2012) to estimate two Gini-like indices representing inequality at the bottom and the top of the income distribution. We also calculate the overall Gini index...

We study a series of sustained growth models in which households' preferences are affected by the consumption of other households as summarized by average consumption. In endogenous growth models, the equilibrium paths involve lower savings and lower growth than the corresponding efficient...

This paper surveys current debates on the distributive cycle. The literature builds on R.M. Goodwin's seminal 1967 chapter titled "A growth cycle." We review theoretical motivations for the distributive cycle, which, despite significant differences, all imply that macroeconomic activity leads...

This paper surveys current debates on the distributive cycle. The literature builds on R.M. Goodwin's seminal 1967 chapter titled "A growth cycle." We review theoretical motivations for the distributive cycle, which, despite significant differences, all imply that macroeconomic activity leads...