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THE DISTRIBUTION OF WEALTH IN THE BLANCHARD–YAARI MODEL

Published online by Cambridge University Press:  10 April 2014

Jess Benhabib ,
Alberto Bisin  and
Shenghao Zhu
Jess Benhabib*
Affiliation:
New York University
Alberto Bisin
Affiliation:
New York University
Shenghao Zhu
Affiliation:
National University of Singapore
*
Address correspondence to: Jess Benhabib, Department of Economics, New York University, 19 West 4th Street, 6th Floor, New York, NY 10012, USA; e-mail: jess.benhabib@nyu.edu.
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Abstract

We study the dynamics of the distribution of wealth in an economy with infinitely lived agents, intergenerational transmission of wealth, and redistributive fiscal policy. We show that wealth accumulation with idiosyncratic investment risk and uncertain lifetimes can generate a double Pareto wealth distribution.

Keywords

Wealth DistributionRate of Return RiskFat Tails
Type
Articles
Information
Macroeconomic Dynamics , Volume 20 , Issue 2: Complexity in Economic Systems , March 2016 , pp. 466 - 481
Copyright
Copyright © Cambridge University Press 2014 

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References

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