GREDEG Economics Journal Club

 

From Trickle-Down to Trickle-Up: Rethinking Growth and Inequality

This session will focus on the relationship between economic inequality and economic growth, revisiting the traditional “trickle-down” perspective and exploring alternative mechanisms through which income distribution may influence macroeconomic dynamics.

Gabriele Salluce, a PhD student in Economics at GREDEG and one of the co-organisers of the Journal Club, will provide a brief introduction to recent trends in economic inequality and to how economists have historically studied the relationship between inequality and economic growth. As background reading, we attach “Inequality and Economic Growth: The Perspective of the New Growth Theories” by Aghion, Caroli, and García-Peñalosa (1999).

Sofia Cattaneo, a visiting student from the University of Turin, will present the paper “An Agent-Based Model of Trickle-Up Growth and Income Inequality” by Palagi, Napoletano, Roventini, and Gaffard (2023).
The paper examines how economic inequality affects aggregate income through a trickle-up growth channel.

For those interested in further context, we also suggest reading the World Inequality Report 2026 (Chancel et al., 2026), which documents recent global trends in income and wealth inequality (you can freely download the report here). The rise in economic inequality poses growing challenges for our societies and is increasingly considered a long-term threat to economic growth, environmental sustainability, and the proper functioning of democratic institutions.