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Technological unemployment and income inequality: a stock-flow consistent agent-based approach

Author

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  • Laura Carvalho
  • Corrado Di Guilmi
Abstract
The paper presents a stock-flow consistent agent-based model with effective demand, endogenous credit creation, and labor-saving technological progress. The aim is to study the joint dynamics of both personal and functional distribution of income as a result of technological unemployment, together with the effect on household debt. Numerical simulations show the potentially destabilizing effect of technological unemployment and reveal that an increase in the profit share of income amplifies the negative effect of income inequality on business cycle and growth. The sensitivity analysis provides indications on the effectiveness of possible mixes of fiscal and redistributive policies, but also demonstrates that the effectiveness of policy measures is strongly dependent on behavioral and institutional factors.

Suggested Citation

  • Laura Carvalho & Corrado Di Guilmi, 2019. "Technological unemployment and income inequality: a stock-flow consistent agent-based approach," Working Papers, Department of Economics 2019_04, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2019wpecon04
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    References listed on IDEAS

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    5. Gregor Semieniuk & Emanuele Campiglio & Jean‐Francois Mercure & Ulrich Volz & Neil R. Edwards, 2021. "Low‐carbon transition risks for finance," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 12(1), January.
    6. Yuri Lima & Carlos Eduardo Barbosa & Herbert Salazar dos Santos & Jano Moreira de Souza, 2021. "Understanding Technological Unemployment: A Review of Causes, Consequences, and Solutions," Societies, MDPI, vol. 11(2), pages 1-17, May.

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    More about this item

    Keywords

    stock-flow agent-based consistent model; income inequality; functional distribution; technological unemployment; social imitation;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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