Heterogeneous Dynasties and Long-Run Mobility

Jess Benhabib, Alberto Bisin and Ricardo Fernholz

The Economic Journal, 2022, vol. 132, issue 643, 906-925

Abstract: Recent empirical work has demonstrated a positive correlation between grandparent-child wealth rank, even after controlling for parent-child wealth rank, and a positive correlation between dynastic wealth ranks across almost six hundred years. We show that a simple heterogeneous agents model with idiosyncratic wealth returns generates a realistic wealth distribution, but fails to capture these long-run patterns of wealth mobility. An auto-correlated returns specification of this model also fails to capture both short- and long-run mobility. However, an extension of the heterogeneous agents model that includes permanent heterogeneity in wealth returns is able to simultaneously match the wealth distribution and short- and long-run wealth mobility.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1093/ej/ueab095 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:econjl:v:132:y:2022:i:643:p:906-925.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Economic Journal is currently edited by Francesco Lippi

More articles in The Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press () and ().