A Note on Income Inequality and Macro-economic Volatility

Income inequality may influence macro-economic variables by affecting the money multiplier and the trade-off between inflation and output. In an AD-AS model with imperfect foresight income inequality intensifies the volatility of output and inflation rate by increasing the likelihood of oscillations as well as their magnitude. Volatility is, however, moderated when income inequality prolongs the business cycles.

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Year of publication:	2000
Authors:	Levy, A.
Institutions:	School of Accounting, Economics, and Finance, University of Wollongong
Subject:	Rational eating \| cycles

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Extent:	application/pdf
Series:	Economics Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	9 pages
Classification:	D31 - Personal Income, Wealth and Their Distributions ; E32 - Business Fluctuations; Cycles
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005212364