Study reveals link between economic growth and wealth inequality dynamics
The article explores how economic growth and wealth inequality are connected when people face borrowing limits and individual risks. The researchers combined two models to study this relationship and found that growth, inequality, and risk all increase together. However, they also discovered that there is a tradeoff between sharing risks and promoting growth for overall well-being. Changes in how wealth is distributed affect the growth rate, which goes through transitional phases before reaching a stable level.