CEF.UP – WiP Webinar

Tuesday – March 23^rd, 2021 at 3:00 p.m.

“How does inequality affect growth on the US and France? A SVAR approach with structural breaks focused on the whole distribution of income and wealth”

Pedro Lima – FEP

Abstract:

“We analyze transmission channels between inequality and growth on the US and France using an approach that innovates twofold: (i) analyzing measures that characterize different parts of the income and wealth distributions; (ii) conducting a time series analysis using a SVAR approach with long-run restrictions that considers the presence of structural breaks in the data. We find that each transmission channel is affected by changes in particular parts of the income and wealth distribution, which are not always consistent with an inequality increase, and there are stark differences in the way each transmission channel operates between different distributions and countries. Our results are robust to alternative long-run specifications and provide an additional explanation for the myriad of results found in the literature that reinforces the complexity of the inequality-growth relationship.”