Income shares, wealth and growth

The paper analyzes the relationship between income shares, wealth and growth in an environment where positional goods are taken into account and rent is generated. This hypothesis, which is a macro engine for inequality, creates a gap between profit share and property share and implies a clear-cut distinction between capital and wealth. The interactions between these aspects are studied in a medium-run growth model led by aggregate demand, where monetary aspects also matter. The results of the dynamic analysis, obtained by means of simulations, are in keeping with some recent stylized facts. Furthermore, the model generates bounded dynamics, where the co-movements between variables are more complex than those obtained in the recent literature. At the same time the disequilibrium processes can create a link between medium-run considerations and a more long-run perspective.