The Impact of Wage Distributions on Economics Growth Based on Multi-agent Simulation

Interaction between wage and economic growth is a very complex process. Scholars have different understandings about the relationship between the two. Some studies find a positive correlation between wage and economic growth, while others find negative correlations. Based on a multi-agent simulation model of the economic growth, we design a wage distribution mechanism to simulate the impact of wage distribution on economic cycles. It is found that there is an inherent relationship between economic growth cycles and the ratio of minimum wage to average wage. Through the empirical analysis using data from the United States between 1982 and 2013, existence of this relationship is confirmed. Understanding such inherent relationship may provide some insights for government to adjust minimum wage according to the pattern of economic cycles, optimize labor and social security policies, and to promote economic growth.