Abstract:
In this paper, a model of the evolution of the Lorenz curve, describing the distribution of income between economic agents, is proposed. It is proved that the evolution of income distribution is consistent with Lorenz majorization in the Ramsey–Bewley model. A Pigou–Dalton transfer (tax and subsidy) system, which generates a stationary income distribution chosen by the welfare state, is constructed. Numerical calculations allow us to formulate a conjecture about the stability of the Lorenz curve corresponding to the selected income distribution.
Key words:Lorenz majorization, A Pigou–Dalton transfer, Ramsey–Bewley model, income distribution, numerical simulation.
