Technological unemployment and income inequality: a stock-flow consistent agent-based approach

Laura Carvalho, Corrado Di Guilmi

    Research output: Contribution to journalArticle

    Abstract

    The paper presents a stock-flow consistent agent-based model with effective demand, endogenous credit creation, and labor-saving technological progress. The aim is to study the joint dynamics of both personal and functional distribution of income as a result of technological unemployment, together with the effect on household debt. Numerical simulations show the potentially destabilizing effect of technological unemployment and reveal that an increase in the profit share of income amplifies the negative effect of income inequality on the business cycle and growth. The sensitivity analysis provides indications on the effectiveness of possible mixes of fiscal and redistributive policies, but also demonstrates that the effectiveness of policy measures is strongly dependent on behavioral and institutional factors.
    Original languageEnglish
    Pages (from-to)39-73
    JournalJournal of Evolutionary Economics
    Volume30
    Issue number1
    DOIs
    Publication statusPublished - 2020

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