Saving and Wealth Inequality

Mariacristina De Nardi and Giulio Fella

No 11746, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Why are some people rich while others are poor? To what extent can governments affect inequality? Which instruments should they use? Answering these questions requires understanding why people save. Dynamic quantitative models of wealth inequality can help us understand and quantify the determinants of the outcomes that we observe in the data and to evaluate the consequences of policy reform. This paper surveys the savings mechanisms generated by the transmission of bequests and human capital, by preference heterogeneity, by rates of returns heterogeneity, by entrepreneurship, by richer earnings processes, and by medical expenses. It concludes that the transmission of bequests and human capital, entrepreneurship, and medical expense risk are crucial determinants of savings and wealth inequality.

Keywords: Wealth; Wealth inequality (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-dge and nep-ent
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Citations: View citations in EconPapers (141)

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Related works:
Journal Article: Saving and Wealth Inequality (2017)
Working Paper: Saving and Wealth Inequality (2017)
Working Paper: Savings and Wealth Unequality (2016)
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