Growth and Structure with Income and Wealth Distribution

This Chapter builds an economic growth model with economic structure and heterogeneous households. The model determines land distribution and value. The model is based on three core theories in economics—Walrasian general equilibrium theory, Ricardian theory of distribution, and neoclassical growth theory. This chapter synthesizes the three theories into a single compact analytical framework. The chapter defines and studies the dynamics and the properties of the economic system. Then it shows how changes such as a rise in group 1’s propensity to save, a rise in group 1’s human capital, a rise in group 3’s propensity to consume agricultural goods, a rise in group 3’s population on the system, an increase in group 1’s population impact the dynamics of economic structure and income and wealth distribution between heterogeneous households.