|Tarasov, Alexander (2009): Income distribution, market structure, and individual welfare. In: The B.E. Journal of Theoretical Economics, Vol. 9, No. 1|
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This paper explores how income distribution affects market structure, prices, and economic well-being of different consumer groups. I consider a general equilibrium model of monopolistic competition with free entry, heterogenous firms and consumers that share identical but non-homothetic preferences. The results in the paper suggest that poverty reduction might be of a greater importance than lowering income inequality, as lower income inequality does not necessarily lead to welfare gains of the poor. In particular, I show that higher income inequality may benefit the poor via a trickle-down effect operating through the entry of firms into the market.
Economics > Chairs > Chair of International Economics
|Subjects:||300 Social sciences > 330 Economics|
|Deposited On:||15. Apr 2014 08:52|
|Last Modified:||29. Apr 2016 09:16|
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Income Distribution, Market Structure, and Individual Welfare. (deposited 15. Apr 2014 08:52)
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