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dc.contributor.authorMatsuyama, Kiminorien_US
dc.date.accessioned2010-05-14T10:19:12Z-
dc.date.available2010-05-14T10:19:12Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/31241-
dc.description.abstractThis paper presents a model of emergent class structure, in which a society inhabited by inherently identical households may be endogenously split into the rich bourgeoisie and the poor proletariat. For some parameter values, the model has no steady state where all households remain equally wealthy. In this case, the model predicts emergent class structure or the rise of class societies. Even if every household starts with the same amount of wealth, the society will experience symmetry-breaking” and will be polarized into two classes in steady state, where the rich maintain a high level of wealth partly due to the presence of the poor, who have no choice but to work for the rich at a wage rate strictly lower than the fair” value of labor. The non-existence of the equal steady state means that a one-shot redistribution of wealth would not be effective, as wealth inequality and the class structure would always reemerge. Thus, the class structure is an inevitable feature of capitalism. For other parameter values, on the other hand, the model has the unique steady state, which is characterized by perfect equality. In this case, the model predicts dissipating class structure or the fall of class societies. Even if the society starts with significant wealth inequality, labor demand by the rich employers pushes up the wage rate so much that workers will escape from the poverty and eventually catch up with the rich, eliminating wealth inequality and the class structure in the long run. In an extension, we introduce self-employment, which not only provides the poor with an alternative to working for the rich, but also provides the rich with an alternative to investment that create jobs. Due to this dual nature of selfemployment, the effects of self-employment turn out to be quite subtle. Yet, within the present framework, it is possible to offer a complete characterization of the steady states even in the presence of self-employment.en_US
dc.language.isoengen_US
dc.publisherNorthwestern Univ., Kellogg Graduate School of Management, Center for Mathematical Studies in Economics and Management Science Evanstonen_US
dc.relation.ispartofseriesDiscussion paper // Center for Mathematical Studies in Economics and Management Science 1407en_US
dc.subject.jelD31en_US
dc.subject.jelO11en_US
dc.subject.ddc330en_US
dc.subject.keywordImperfect Credit Marketsen_US
dc.subject.keywordDistribution of Household Wealthen_US
dc.subject.keywordVertical Division of Laboren_US
dc.subject.keywordEndogenous Inequalityen_US
dc.subject.keywordUnattainability of Classless Societyen_US
dc.subject.keywordSymmetry-Breakingen_US
dc.subject.stwSoziale Schichten_US
dc.subject.stwArbeitsteilungen_US
dc.subject.stwVermögensverteilungen_US
dc.subject.stwTheorieen_US
dc.titleThe 2005 Lawrence R. Klein lecture: emergent class structureen_US
dc.typeWorking Paperen_US
dc.identifier.ppn587317299en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Discussion Papers, Kellogg School of Management, Northwestern University

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