@techreport{6161f5407513448aa0f142f72f7ae2cc,
title = "Wealth inequality and aggregate demand",
abstract = "The paper investigates how including the distribution of wealth changes the demand effects of redistributing functional income. It develops a model with an endogenous wealth distribution and shows that the endogenous rise in wealth inequality resulting from a redistribution towards profits weakens the growth effects of this redistribution. Consequently, a wage-led regime becomes more strongly wage-led. A profit-led regime on the other hand becomes less profit-led and there may even be a regime switch - in this case the short-run profit-led economy becomes wage-led in the long run due to the endogenous effects of wealth inequality. The paper thereby provides a possible explanation for the instability of demand regimes over time.",
author = "Stefan Ederer and Miriam Rehm",
year = "2019",
doi = "10.57938/6161f540-7513-448a-a0f1-42f72f7ae2cc",
language = "English",
series = "Ecological Economic Papers",
number = "30",
publisher = "WU Vienna University of Economics and Business",
address = "Austria",
type = "WorkingPaper",
institution = "WU Vienna University of Economics and Business",
}