Intergenerational Mobility and Macroeconomic Dynamics: An Agent-Based Modelling Approach

The main contribution of this thesis is the extension of the agent-based model developed by Palagi et al. 2021, to incorporate heterogeneity in the expected value of productivity shock based on family socioeconomic status, which provides new insights into the relationship between intergenerational mobility and macroeconomic dynamics. The intergenerational mobility is one of the most relevant contemporary issue, that has both economic and social consequences. It is defined as the social changes that can occur between generations in a household. The intergenerational mobility is a complex phenomenon and may concern several aspects, such as income, wealth, education, employment and health. The empirical evidence shows that the countries with a higher level of inequality on income are also the same in which the intergenerational mobility is more rigid, which means that the parent’s income matters more respect to the merit in determining the income of children. Simulation results show that our implementation reproduces the most important stylized facts about intergenerational mobility and income inequality (such as the Great Gatsby curve). Our findings highlights the importance of targeted fiscal policies in favour of poor households, such as increased funding for education, as well as progressive taxation, can significantly improve intergenerational mobility and promote economic growth