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Capital market risk and the dynamics of the income distribution
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Cripps, Martin (1999) Capital market risk and the dynamics of the income distribution. Working Paper. Coventry: University of Warwick. Centre for the Study of Globalisation and Regionalisation. Working papers (University of Warwick. Centre for the Study of Globalisation and Regionalisation) (No.33/).
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Official URL: http://www2.warwick.ac.uk/fac/soc/csgr/research/wo...
Abstract
This paper introduces a dynamic model of the wealth distribution with aggregate risk in the capital market; the model combines credit rationing and portfolio selection decisions. In a closed economy the long-run behaviour of wealth is independent of the initial income distribution when there is aggregate uncertainty, although further restrictions are necessary when there is no aggregate uncertainty. There can be credit rationing at the long-run equilibrium. In poor economies aggregate risk in the capital market slows growth, whereas in richer economies a risky capital market is good for income growth.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor | ||||
Divisions: | Faculty of Social Sciences > Centre for the Study of Globalisation and Regionalisation | ||||
Library of Congress Subject Headings (LCSH): | Capital market -- Mathematical models, Risk management, Distribution (Economic theory), Uncertainty -- Mathematical models | ||||
Series Name: | Working papers (University of Warwick. Centre for the Study of Globalisation and Regionalisation) | ||||
Publisher: | University of Warwick. Centre for the Study of Globalisation and Regionalisation | ||||
Place of Publication: | Coventry | ||||
Official Date: | May 1999 | ||||
Dates: |
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Number: | No.33/ | ||||
Number of Pages: | 38 | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) |
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