History Dependent Growth Incidence: A Characterization and an Application to the Economic Crisis in Italy

Abstract

The aim of this paper is to propose an axiomatic characterization of an aggregate measure of growth that takes into account the initial economic conditions of individuals, through their position in the initial income distribution. The contribution of our work to the existing literature is twofold. The first is to provide a unifying framework for the derivation of an absolute and a relative measure of individual growth. The second is represented by the aggregation procedure which leads to a generalization of existing measures of growth. We apply our theoretical framework to evaluate the growth processes experienced by the Italian population in the last decade in order to investigate the history dependent distributional effect of the recent economic crisis.