Saving and Wealth Inequality

Mariacristina De Nardi and Giulio Fella

No 823, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: Why are some people wealth 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 to 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 rate of return 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 and that we need to look at more data to measure their relative importance.

Keywords: Human Capital; Bequests; Taxation; Entrepreneurship; Rates of Return; Earnings Shocks (search for similar items in EconPapers)
JEL-codes: D14 D3 E21 (search for similar items in EconPapers)
Date: 2017-05-09
New Economics Papers: this item is included in nep-dge, nep-ent and nep-mac
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Citations: View citations in EconPapers (121)

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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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Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:823

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