Panoeconomicus 2019 Volume 66, Issue 2, Pages: 145-163
https://doi.org/10.2298/PAN160220031M
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Why market imperatives invigorate economic inequality? Cobb-Douglas utility remodelled
Maialeh Robin (University in Prague, Czech Technical, Masaryk Institute of Advanced Studies, Prague, Czech)
The aim of the article is to demonstrate on a familiar example of
Cobb-Douglas utility function principles of intertemporal resource
allocation under general market conditions. The enormous increase of data
availability and progress in data analysis in recent decades caused that
empirical inequality research has created a robust base of results. On the
other hand, researchers face serious interpretation difficulties. Empirical
results do not speak for themselves but only through interpretative theory.
Hence, the article provides a theoretical scheme which clarifies fundamental
inequality-driving forces and which reveals economic inequalities as the
intrinsic feature of market economies.
Keywords: Cobb-Douglas utility, economic inequality, market forces