Working Paper: NBER ID: w21924
Authors: Jess Benhabib; Alberto Bisin
Abstract: Invariably across a cross-section of countries and time periods, wealth distributions are skewed to the right displaying thick upper tails, that is, large and slowly declining top wealth shares. In this survey we categorize the theoretical studies on the distribution of wealth in terms of the underlying economic mechanisms generating skewness and thick tails. Further, we show how these mechanisms can be micro-founded by the consumption-saving decisions of rational agents in specific economic and demographic environments. Finally we map the large empirical work on the wealth distribution to its theoretical underpinnings.
Keywords: No keywords provided
JEL Codes: B16; E13; E21; E24; E25
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| skewed earnings (J31) | wealth distribution (D31) |
| stochastic returns on wealth (G19) | skewness of wealth distributions (D31) |
| consumption-saving decisions (E21) | skewness of wealth distributions (D31) |
| theoretical mechanisms (B52) | observed wealth distribution (D31) |