20
q»''(j) = qii(w) * f (^ w - y ) (11)
How can this series of transformations square
so as to produce a steady state of the joint distribution?
■*•0 explain this -are have to separate income at least theoretically
into earned and unearned income, -he distribution of earned
income has to be regarded as given from outside; its explanation
has to be sought separately; empirically at any rate it is
a Pareto distribution. It may be regarded as constant in the
simplest case. From it flows the continuing primary accumulation
which contributes to the accumulation of existing wealth holders
and also creates new wealth holders ( a kind of social mobility ).
This wealth then creates property income and secondary accumulation.
The process leads from a relatively moderate inquality of
earned income to more unequal primary wealth, and even core
unequal secondary wealth.
-*-n this way wa can imagine that total income
and total wealth will grow at constant rates. The corresponding
allometric proportion does not appear directly in the cross-section
where instead appear the two regression lines which are neither
of them a reliable estimate of the ratio of the two Pareto coefficients.
Can this be regarded ad the reason why the attempt
at empirical verification of equation (3^ on the basis of Swedish
and ^’hch data lead to unsatisfactory results?