Working Paper
On the Modeling of the Income Distribution Business Cycle Dynamics
Burkhard Heer
CESifo, Munich, 2007
CESifo Working Paper No. 1945
CESifo, Munich, 2007
CESifo Working Paper No. 1945
![](https://cesifo.org/DocImg/cesifo1_wp1945.jpg?c=1689236848)
Empirically, the income share is procyclical for the low-income groups and acyclical for the top 5%. We find that business cycle models should consider overlapping generations and elastic labor supply in order to replicate this finding.
Keywords: income distribution, business cycle, overlapping generations