Inequalities and Patience in Catching Up
Iwasa, Kazumichi; Zhao, Laixun | February 2017
Abstract
This paper examines how impatience interacts with inequalities in economic development. We consider two distinct groups of households (i.e., with intrinsic inequality), and show that (i) under decreasing marginal impatience (DMI), an unequal society may be preferable for poor households; (ii) poor households tend to benefit more from positive shocks under DMI than constant marginal impatience; (iii) inequality exhibits a sharp inverted-U shape as more people become rich, which should be good news for developing countries in catching up; and (iv) a tax on capital income reduces poor households income when the fraction of the rich is sufficiently small. We also extend the basic model to examine the effects of immigration into rich countries.
Citation
Iwasa, Kazumichi; Zhao, Laixun. 2017. Inequalities and Patience in Catching Up. © Asian Development Bank Institute. http://hdl.handle.net/11540/8754.Keywords
Alleviating Poverty
Anti-Poverty
Extreme Poverty
Fight Against Poverty
Global Poverty
Health Aspects Of Poverty
Indicators Of Poverty
Participatory Poverty Assessment
Poverty Eradication
Poverty Analysis
Poverty In Developing Countries
Poverty Reduction Efforts
Urban Poverty
Public Financial Management
Financial System
Financial Statistics
Foreign Direct Investment
Foreign and Domestic Financing
Development Indicators
Environmental Indicators
Economic Indicators
Educational Indicators
Demographic Indicators
Health Indicators
Disadvantaged Groups
Low Income Groups
Socially Disadvantaged Children
Rural Conditions
Rural Development
Social Conditions
Urban Development
Urban Sociology
Pension Funds
Mutual Funds
Social Equity
Financial Aspects
Fiscal Policy
Poor
Economic forecasting
Health expectancy
Social groups
Political participation
Distribution of income
Inequality of income
Developing countries
Rural community development
Mass society
Social change
Social policy
Social stability
Population
Sustainable development
Peasantry
Urban policy
Urban renewal
Pension plans
Individual retirement accounts
Employee pension trusts
Investment management
Investments
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