Effects of Income Inequality on Wealth in Iran

Examining the relationship between income distribution and wealth distribution in Iran is very important in terms of economic and social consequences. Therefore, examining the Short-term and long-term inequality of income distribution and wealth distribution in Iran can provide some answers to the questions of policymakers and economic analysts. Focusing on Iran, this research has been conducted based on Piketty's dynamic model of wealth inequality in the time period of 2002-2019. The results showed that in the short term, different assets grow at different rates, and since the ability to earn and save income of the upper deciles is more than the lower deciles, it is expected that the distribution of income will become more unequal and lead to the inequality of wealth distribution. It is also predicted that in the long term, in a stable state, if the return on capital is zero, the advantage of the assets will be lost and will grow with the inflation rate. But what is happening in reality is that the process of distribution of income and share of wealth is in favor of the top 10% of the income decile and the distribution of wealth has become more unequal.