Quantitative Models of Wealth Inequality: A Survey
Mariacristina De Nardi ()
No 21106, NBER Working Papers from National Bureau of Economic Research, Inc
While in the data wealth is concentrated in the hands of a small number of rich people and the saving rate of the rich is high, many models used for quantitative policy evaluation fail to match these facts. In addition, some of the models that succeed in matching these facts have radically different policy implications, depending on the nature and strength of the saving motives assumed. This paper surveys the savings mechanisms proposed so far (preference heterogeneity, transmission of bequests and human capital across generations, entrepreneurship, and high earnings risk for the top earners) and argues that more work is needed to understand wealth inequality and the saving motives behind it, and to evaluate policy more reliably.
JEL-codes: D14 D31 E21 H2 (search for similar items in EconPapers)
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