In order to analyze the importance

In order to analyze the importance of the capital stock of the capitalist and under what circumstances it BV6 is positive in equilibrium, the value of the share of the capital stock will derive of the other class in the capital stock of the economy. From Eqs. (3.2)–(3.4), the capital stock of the working class can be defined as the sum of its intergenerational assets over the assets of the life cycle, i.e.:where r* is given by (3.7). Thus, in equilibrium, we have:where (B/K)* is given by (3.12). Thus, the capital share of the capitalist (K/K) will be positive, if the right side of (3.13) is smaller than 1. This will occur when: So when (3.17) is satisfied, there is K/K>0 and the capitalist exists in equilibrium with a positive share of the total intergenerational inheritance (this is because the sine qua non condition necessary for the existence of the capitalist in the model is that B is a positive value). Finally, the effect of taxation on the distribution of capital on the two classes, including both intergenerational assets and the life cycle will be verified. From (3.16) it follows that:Similarly to the simpler case studied in Section 2, it turns out again that taxation affects the distribution of wealth between the classes since it increases the participation of the working class in the total capital stock of the economy.
Conclusions Other results found were: