1. Relative wealth, status-seeking, and catching-up
- Author
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Van Long, Ngo and Shimomura, Koji
- Subjects
- *
WEALTH , *ELASTICITY (Economics) , *BUSINESS , *FORTUNE - Abstract
According to our studies if relative wealth appears in the reduced-form utility function (for example, because of status-seeking) then the poor will catch up with the rich if the elasticity of marginal utility of relative wealth is greater than the elasticity of marginal utility of consumption. We give sufficient conditions for the final distribution of wealth to be independent of the initial distribution and conditions for saddlepoint-stability in a two-class model. [Copyright &y& Elsevier]
- Published
- 2004
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