Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282405 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10717
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We study a growth model with two types of agents who are heterogeneous in their degree of family altruism. We prove that every equilibrium path converges to a unique steady state, and study the effect of altruism on the properties of steady-state equilibrium. We show that aggregate income is positively related to both level of altruism and altruism heterogeneity. When altruism heterogeneity is low, income inequality follows an inverse U-shaped pattern relative to the level of altruism, which is consistent with the cross-country Kuznets curve. When altruism heterogeneity is high, income inequality monotonically decreases with the level of altruism. Our results suggest that heterogeneous altruism is an important mechanism linking economic growth and income inequality.
Subjects: 
economic growth
heterogeneous agents
altruism
bequests
inequality
Kuznets curve
JEL: 
D15
D64
E21
O40
Document Type: 
Working Paper
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