The wealth distribution in Bewley economies with capital income risk

We study the wealth distribution in Bewley economies with idiosyncratic capital income risk. We show analytically that under rather general conditions on the stochastic structure of the economy, a unique ergodic distribution of wealth displays a fat tail.

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Bibliographic Details
Published in:Journal of economic theory 2015-09, Vol.159, p.489-515
Main Authors: Benhabib, Jess, Bisin, Alberto, Zhu, Shenghao
Format: Article
Language:English
Subjects:
Bewley economies
Capital income risk
Capital returns
Displays
Economic structure
Economic theory
Economics
Ergodic processes
Fat tails
Income
Income distribution
Mathematical analysis
Pareto distribution
Risk
Risk theory
Stochastic models
Stochastic processes
Stochasticity
Structural analysis
Studies
Wealth
Wealth distribution
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Description
Summary:We study the wealth distribution in Bewley economies with idiosyncratic capital income risk. We show analytically that under rather general conditions on the stochastic structure of the economy, a unique ergodic distribution of wealth displays a fat tail.
ISSN:0022-0531
1095-7235
DOI:10.1016/j.jet.2015.07.013