Left and right: a tale of two tails of the wealth distribution
Marcello D’Amato,
Christian Di Pietro,
Marco M. Sorge
Abstract:We study a model of wealth accumulation in altruistic lineages, in which households face uninsurable risk, investment indivisibilities and borrowing constraints. A thick upper tail of the stationary distribution of wealth is shown to emerge as a robust prediction, irrespective of (1) the presence of multidimensional (wealth and ability) heterogeneity and non-convexities in human capital formation, and (2) the nature of parental bequest motives (joy-of-giving vs. paternalism). Additionally, (3) we identify cond… Show more
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