If Piketty's main theoretical prediction (rg leads to rising wealth inequality) is taken to its radical conclusion, then a small elite will own all wealth if capitalism is left to its own devices. We formulate and calibrate a Post-Keynesian model with an endogenous distribution of wealth between...

If Piketty's main theoretical prediction (rg leads to rising wealth inequality) is taken to its radical conclusion, then a small elite will own all wealth if capitalism is left to its own devices. We formulate and calibrate a Post-Keynesian model with an endogenous distribution of wealth between...

Recent studies (Galor and Zeira (1993), Banerjee and Newman (1993)) argue that, because of capital market imperfections, income inequality leads to inefficiencies which impede economic growth. By contrast, Keynes believed that since the rich save at a higher rate than the poor, income inequality...