I was reading about Marx's Crisis Theory. On one hand, there is this idea of the falling surplus. But on the other hand, he relates income inequality to the business cycle.

Have his ideas regarding the relation between inequality and the business cycle been formalized (mathematically)? Where can I read those? And are there other (Marxian or non-Marxian, including neo-classical/ Keynesian) mathematical models that relate income or wealth inequality and the business cycle? Where can I read those?

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    $\begingroup$ do you mean you can't find any papers on inequality and recessions? $\endgroup$ – SX welcomes ageist gossip Apr 12 at 15:45
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    $\begingroup$ This question probably has too large a scope. Each of Marxian, neo-classical, and post-Keynesian each has a separate theory of the business cycle, and probably inequality (I am more familiar with business cycle theory). There is also the question of the definition of inequality: wealth or income. The fall in the stock market reduces wealth inequality (the hard way), since wealthy cohorts own most of the stock market. $\endgroup$ – Brian Romanchuk Apr 12 at 20:46
  • $\begingroup$ Fizz I am sorry, I was not clear enough, I queried about theoretical models where wealth/income inequality lead to recession. Many papers study how inequality is affected by recessions, but I wanted to know if there are models that indicate otherwise, similar to what Marx said (apart from the tendency of rate of surplus to fall). Basically, are his verbal arguments mathematically formalised somewhere, and are there other models that do not follow his reasoning, but find a relation anyway, claiming wealth/income inequality causes/prevents recession's. $\endgroup$ – Ishan Kashyap Hazarika Apr 13 at 3:53
  • $\begingroup$ Brian Romanchuk I understand there are a lot of models and theories, I just wanted either a short summary or at least examples of some theoretical models that argue that either income/wealth inequality causes or prevents recessions. Thank you $\endgroup$ – Ishan Kashyap Hazarika Apr 13 at 3:56

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