SavedAdd your journal

Journals / Finans Politik ve Ekonomik Yorumlar Dergisi / 2017 / Cilt: 54 - Sayı: 628

A Model on Relative Deprivation, Inequality and Growth

Göreceli Yoksunluk, Eşitsizlik ve Büyüme Üzerine Bir Modelleme

Ünay Tamgaç TEZCAN
Pages
29–41
DOI
—
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

According to the findings, the ambiguous relationship between inequality and growth persists

📌 3 Key Takeaways

🎯
Objective & Hypothesis:We attempt to investigate the old debate of the effects of inequality on growth by extending the early growth models with the relatively new findings on the role of social rewards, particularly the concept of “relative deprivation” (hereafter RD).
📊
Key Findings & Data:One response for the discontent of falling behind others might be for people to increase their effort to accumulate wealth (to save or to work harder).
💡
Conclusion & Impact:According to the findings, the ambiguous relationship between inequality and growth persists
🔬Design:Modeling & Simulation
📍Scope:Comprehensive Sample
⚙️Variables:Domain Parameters

Abstract

We attempt to investigate the old debate of the effects of inequality on growth by extending the early growth models with the relatively new findings on the role of social rewards, particularly the concept of “relative deprivation” (hereafter RD). One response for the discontent of falling behind others might be for people to increase their effort to accumulate wealth (to save or to work harder). In such a setting, we might observe a growth effect. Our motive is to show that increased effort to work and accumulate wealth as result of RD can lead to higher growth as inequality increases.We extend a classical growth model where individuals like consumption and dislike work by including a concern for RD measured as a function of individual’s total wealth. We show that when individuals are concerned for RD, inequality can either be growth enhancing or growth reducing depending how the utility function responds to the disutility from labor. We analyze the conditions under which inequality translates to higher or lower growth and how the concern for RD affects wealth accumulation. According to the findings, the ambiguous relationship between inequality and growth persists

Özet

Bu makale, eşitsizliğin büyüme üzerindeki etkileriyle ilgili eski tartışmayı, büyüme modellerini sosyal ödüllerin rolüne ait nispeten yeni bulgular ve özellikle "Göreceli-Yoksunluk" (GY) kavramı ile genişleterek araştırmak için bir girişimdir. Çevresine kıyasla yoksunlaşmanın yarattığı hoşnutsuzluğa bir tepki, insanları servet biriktirme gayretlerini arttırmaları (daha fazla tasarruf ya da daha çok çalışmayla) olabilir. Böyle bir ortamda nispeten yoksun olmanın sonucu olarak büyüme etkisi gözlemlenebilir. Makalenin amacı GY sonucu artan çalışma gayreti ve servet biriktirme arzusunun eşitsizlik arttıkça beraberinde yüksek büyüme getirebileceğini göstermektir.Bireylerin tüketimi sevip çalışmayı sevmediği klasik bir büyüme modelini, bireyin toplam servetinin bir fonksiyonu olarak ölçtüğümüz GY ölçütünü ekleyerek geliştiriyoruz. Bireylerin GY'a önem vermesi durumunda, emeğin fayda fonksiyonunda nasıl tepki verdiğine bağlı olarak eşitsizliğin büyüme arttırıcı ya da azaltıcı etkisi olabileceğini gösteriyoruz. Eşitsizliğin hangi koşullar altında yüksek veya düşük büyümeye dönüştüğünü ve GY endişesinin servet birikimini nasıl etkilediğini inceliyoruz. Model sonuçlarına göre büyüme ile servet eşitsizliği arasındaki ilişki belirsizliğini korumaktadır

🔖

Cite This Article

TEZCAN, Ü. T. (2017). A Model on Relative Deprivation, Inequality and Growth. Finans Politik ve Ekonomik Yorumlar Dergisi, Cilt: 54 - Sayı: 628, 29–41. https://ajindex.com/articles/223910

References (17)

  1. AGHİON, P. and BOLTON, P., (1997), “A Trickle-Down Theory of Growth and Development with Debt Overhang”, Review of Economic Studies, 64(2), pp. 151-162.
  2. AGHİON, P. CAROLİ, E. and GARCİA-PENALOSA, C.; (1999), “Inequality and Economic Growth: The Perspective of the New Growth Theories”, Journal of Economic Literature, 37(4), pp. 1615-1660.
  3. ALESİNA, A. and PEROTTİ, R.; (1996), “Income Distribution, Political Instability and Investment”, European Economic Review, 81(5), pp. 1170–1189.
  4. ALESİNA, A. and RODRİK, D.; (1994), “Distributive Politics and Economic Growth”, Quarterly Journal of Economics, 109 (2), pp. 465-490.
  5. BENABOU, R.; (1996), “Inequality and Growth”, NBER Macroeconomics Annual, pp. 11–73
  6. BENHABİB, J. and RUSTİCHİNİ, A.; (1998), “Social Conflict and Growth”, Journal of Economic Growth,1(1), pp. 143-158.
  7. BERTOLA, G.; (1993), “Factor Shares and Savings in Endogenous Growth”, American Economic Review, 83, pp. 1184–1198.
  8. BİLANCİNİ, E. and D’ALESSANDRO, S.; (2012), “Long-run welfare under externalities in consumption, leisure, and production: A Case for Happy Degrowth vs. Unhappy Growth”, Ecological Economics, 84(C), pp. 194-205
  9. BLANCHFLOWER, D. G. and OSWALD, A. J.; (2008) “Hypertension and Happiness across Nations.” Journal of Health Economics, 27( 2), pp. 218-233.
  10. BOSSERT, W. and D’AMBROSİO, C.; (2006), “Reference Groups and Individual Deprivation.” Economics Letters, 90 (3), pp. 421-426.
  11. CHOU, C. F., and TALMAİN, G.; (1996), “Redistribution and Growth: Pareto Improvements”, Journal of Economic Growth, 1 (4), pp. 505-523.
  12. CLARK, A. and OSWALD, A.; (1996), “Satisfaction and Comparison Income”, Journal of Public Economics, 61(3), pp. 359- 381. COLE, H. L., MAİLATH, G. J. and POSTLEWAİTE, A.; (1992), “Social Norms, Savings Behavior, and Growth”, Journal of Political Economy, 100(6), pp. 1092-1125.
  13. CORNEO, G. and JEANNE, O.; (1999), “Pecuniary Emulation, Inequality and Growth”, European Economic Review, 43(9), pp. 1665-1678.
  14. CORNEO, G. and JEANNE, O.; (2001) “Status, the Distribution of Wealth, and Growth”, Scand Journal of Economics, 103(2): pp. 283–293.
  15. EASTERLİN, R. A.; (1995), “Will Raising the Incomes of All Increase the Happiness of All?”, Journal of Economic Behavior and Organization, 27, pp. 35-47.
  16. EBERT, U. and MOYES, P.; (2000), “An Axiomatic Characterization of Yitzhaki’s Index of Individual Deprivation.” Economics Letters, 68 (3), pp. 263-270.
  17. FERRER-İ-CARBONNEL, A.; (2005), “Income and Well-Being: An Empirical Analysis of The Comparison Inc