Foreign, Commonwealth & Development Office
Foreign, Commonwealth & Development Office
10/17/2024 | Press release | Distributed by Public on 10/17/2024 08:54
Income inequality and growth: calibration and simulation for the Kenyan economy
Income inequality and growth: calibration and simulation for the Kenyan economy
Investigates the decline in wealth and income inequality in Kenya between 2005 and 2015.
From:Foreign, Commonwealth & Development OfficePublished31 March 2024
Abstract
This study investigate the notable decline in wealth and income inequality in Kenya over the 10 year period between 2005 and 2015. Using a calibrated continuous time heterogeneous agent model, it attributes up to 92% of the variation in top wealth inequality to a persistent but slow increase in the return to capital, a low risk free rate, and rising "effective" income tax rates. This study suggests that a macroeconomic environment characterized by low risk free interest rates anchored by low debt to fiscal revenue ratios are key to reducing both wealth and income inequality.
This research is part of the Capacity for Economic Research and Policy making in Africa (CERPA) programme.
Citation
Mbara G. 'Income inequality and growth: calibration and simulation for the Kenyan economy' 2024
Links
Income inequality and growth: calibration and simulation for the Kenyan economy
Updates to this page
Published 31 March 2024