6533b824fe1ef96bd1281651

RESEARCH PRODUCT

World Interest Rates and Inequality: Insight from the Galor - Zeira Model

Michele BattistiTamara FioroniAndrea Mario Lavezzi

subject

Economics and EconometricsInequalitymedia_common.quotation_subjectKeynesian economics05 social sciencesInterest rateGalor-Zeira modelInequalityIncome distributionWorld interest rates0502 economics and businessEconomics050207 economicsSettore SECS-P/01 - Economia PoliticaMultiple steady statesInequality Economic Growth Multiple Steady States World Interest RatesEconomic growth050205 econometrics media_common

description

In this paper, we study the relationship between changes in the world interest rate and within-country inequality during the 1985–2005 period in which the world interest rate sharply declined. In line with the predictions of the seminal model of Galor and Zeira [Income distribution and macroeconomics. Review of Economic Studies 60, 35–52], the analysis suggests that the decrease in the world interest rate is associated with a decrease in inequality in poor countries and an increase in inequality in rich ones.

yearjournalcountryeditionlanguage
2018-11-15
10.1017/s1365100518000652http://hdl.handle.net/11562/987312