Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/31241 
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dc.contributor.authorMatsuyama, Kiminorien
dc.date.accessioned2010-05-14T10:19:12Z-
dc.date.available2010-05-14T10:19:12Z-
dc.date.issued2005-
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
dc.language.isoengen
dc.publisher|aNorthwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science |cEvanston, ILen
dc.relation.ispartofseries|aDiscussion Paper |x1407en
dc.subject.jelD31en
dc.subject.jelO11en
dc.subject.ddc330en
dc.subject.keywordImperfect Credit Marketsen
dc.subject.keywordDistribution of Household Wealthen
dc.subject.keywordVertical Division of Laboren
dc.subject.keywordEndogenous Inequalityen
dc.subject.keywordUnattainability of Classless Societyen
dc.subject.keywordSymmetry-Breakingen
dc.subject.stwSoziale Schichten
dc.subject.stwArbeitsteilungen
dc.subject.stwVermögensverteilungen
dc.subject.stwTheorieen
dc.titleThe 2005 Lawrence R. Klein lecture: emergent class structure-
dc.typeWorking Paperen
dc.identifier.ppn587317299en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:nwu:cmsems:1407en

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