High-Level Structure of SIGMA model

To test the hypothesis, we developed a simple four-sector, demand-driven model of Savings, Inequality and Growth in a MAcroeconomic framework (SIGMA) with exogenous growth and net savings rates. We then used SIGMA to explore the evolution of inequality in the context of declining economic growth.

 

Contrary to the general hypothesis, we find that inequality does not necessarily increase as growth slows down. In fact, there are certain conditions under which inequality can be ameliorated significantly, or even entirely eliminated, as growth declines.

 

The results are described in our PASSAGE working paper (No 14/02) ‘Does slow growth increase inequality?’. The paper also discusses the implications of our findings for questions of employment, government policy and the politics of de-growth. An updated version of our research is in press with the journal Ecological Economics.

 

Interested readers can explore the implications for themselves in the online beta version of SIGMA [available on the Desktop version of this page].

 

Publications

 

Jackson, T and  P Victor 2016.  ➤ Does slow growth lead to rising inequality? Some theoretical reflections and numerical simulations. Ecological Economics, Vol 121, pp. 206–219.

 

Jackson, T and P Victor 2014. ​ Does slow growth increase inequality? - A stock-flow consistent exploration of the ‘Piketty hypothesis’. PASSAGE Working Paper 14/02. Guildford: University of Surrey.