Macroeconomics and Monetary Economics

Sponsor: FNRS - CDR
Promoter: Luca Pensieroso

Project description

This project aims at investigating an overlooked mechanism to explain the persistence of income inequality in a Malthusian epoch: the emergence of conspicuous consumption among the ruling elite. We will tackle the issue both from a theoretical and an empirical point of view. For what concerns the theory contribution, we shall introduce property rights on the productive assets of the economy, and subsistence and conspicuous consumption in a model of Malthusian stagnation. We shall study their effects — one-by-one, and jointly — on inequality, both in the long run, and along the transitional dynamics. For what concerns the empirical part, we will compare the qualitative and quantitative predictions of the model with the existing (sparse) long-run evidence on income inequality in ancient and middle-age Europe. We shall then turn to modern survey data on Africa, to verify whether a negative relationship between conspicuous consumption and fertility can be observed at a more micro level, in those contexts where the demographic transition is still arguably ongoing.