Botta, Alberto ORCID: 0000-0001-9464-8251, Caverzasi, Eugenio, Russo, Alberto, Gallegati, Mauro and Stiglitz, Joseph E. (2018) Inequality and finance in a rent economy. [Working Paper]

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Abstract

The present paper aims at offering a contribution to the understanding of the interactions between finance and inequality. We investigate the ways through which income and wealth inequality may have influenced the development of modern financial systems in advanced economies, the US economy first and foremost, and how modern financial systems have then fed back on income and wealth distribution. We focus in particular on securitization and on the production of complex structured financial products. We analyse this topic by elaborating a simulated hybrid Agent-Based Stock-Flow-Consistent (AB-SFC) macroeconomic model, encompassing heterogeneous (i.e. households) and aggregate sectors. Our findings suggest that the increase in economic growth, favoured by the higher level of credit supply coming with securitization, may determine a more unequal and financially unstable economic system.

Item Type:	Working Paper
Uncontrolled Keywords:	Inequality, securitization, rent economy, financial crisis, AB model, SFC approach
Subjects:	H Social Sciences > HG Finance
Faculty / School / Research Centre / Research Group:	Faculty of Business Faculty of Business > Department of International Business & Economics Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) > Greenwich Political Economy Research Centre (GPERC)
Last Modified:	04 Aug 2021 16:33
URI:	http://gala.gre.ac.uk/id/eprint/20377

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