Three Essays on Economic Inequality and Macroeconomic Dynamics

Economic inequality in income (Atkinson et al., 2011) and wealth (Piketty and Zucman, 2014; Chancel et al., 2022) has become a defining challenge of the twenty-first century, affecting not only individual livelihoods but also the broader macroeconomy. Addressing this challenge requires analytical tools capable of capturing the complexities of inequality and informing effective policy interventions. This thesis is grounded in the evolutionary paradigm, understanding economic systems as complex evolving entities (Nelson and Winter, 1982; Dosi et al., 2002; Dosi and Roventini, 2019; Dosi and Virgillito, 2021; Dosi, 2023). Agent-based models (ABMs) formalize this perspective by representing economic dynamics as the outcome of decisions and the interactions of economic agents operating in far-from-equilibrium conditions (Tesfatsion, 2006; LeBaron and Tesfatsion, 2008; Battiston et al., 2016). In this thesis, ABMs are used to examine the interplay between economic inequality and macroeconomic dynamics, providing new insights into the transmission of monetary policy, the implications of meritocracy-driven inequality, and the distributive effects of AI-driven automation. The thesis is organised into three main chapters, each employing a tailored ABM to explore a specific research question. Chapter 1 investigates the transmission of monetary policy in the Euro Area through its direct and indirect effects on the income and wealth distribution, showing how the effects of monetary policy interventions are shaped by household heterogeneity, economic and institutional factors. Chapter 2 explores the role of access to education in driving intergenerational inequality and long-term economic growth in the United States, emphasising the hidden costs of meritocratic systems and the importance of inclusive educational policies. Chapter 3 develops an AI automation scenario for Austria, highlighting the distributive consequences of AI-driven productivity gains between workers and between workers and capital owners. Together, these chapters contribute to the literature on economic inequality and macroeconomic modelling, advancing our understanding of the mechanisms driving inequality and its macroeconomic consequences and the value of agent-based computational economics as a powerful tool for analysing inequality and evaluating policy interventions.