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Relative deprivation, wealth inequality and economic growth

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Abstract

This paper presents an endogenous growth model where utility depends on relative deprivation as well as consumption. It is shown that a negative relationship exists between wealth inequality and equilibrium growth rate. In addition, if the concern for relative deprivation is strong enough, instantaneous utility decreases while aggregate income increases.

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Authors and Affiliations

  1. c/o Mrs Lisa Ho, School of Business, University of Nottingham - Malaysia, Jalan Broga, 43500, Semenyih, Selangor, Malaysia

    Baochun Peng

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  1. Baochun Peng
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Correspondence to Baochun Peng.

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Peng, B. Relative deprivation, wealth inequality and economic growth. J Econ 94, 223–229 (2008). https://doi.org/10.1007/s00712-008-0014-2

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  • DOI: https://doi.org/10.1007/s00712-008-0014-2

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