WORLD INTEREST RATES AND INEQUALITY: INSIGHT FROM THE GALOR–ZEIRA MODEL
- Autori: Battisti Michele, Fioroni Tamara, Lavezzi Andrea Mario
- Anno di pubblicazione: 2020
- Tipologia: Articolo in rivista (Articolo in rivista)
- OA Link: http://hdl.handle.net/10447/313845
Abstract
In this paper, we study the relationship between changes in the world interest rate and within-country inequality during the 1985–2005 period in which the world interest rate sharply declined. In line with the predictions of the seminal model of Galor and Zeira [Income distribution and macroeconomics. Review of Economic Studies 60, 35–52], the analysis suggests that the decrease in the world interest rate is associated with a decrease in inequality in poor countries and an increase in inequality in rich ones.