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Increasing Inequality and Financial Fragility in an An Agent Based Macroeconomic Model

Russo, Alberto and Riccetti, Luca and Gallegati, Mauro (2013): Increasing Inequality and Financial Fragility in an An Agent Based Macroeconomic Model.

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Abstract

The aim of this paper is to investigate the relationship between increasing inequality and financial fragility in an agent based macroeconomic model. We analyse the effects of a non-linear relationship between wealth and consumption on the evolution of the economic system. Preliminary results show that more inequality rises macroeconomic volatility, increasing the likelihood of observing large unemployment crises.

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