Saving and Wealth Inequality

By Mariacristina De Nardi, Giulio Fella. 2017

130 citations recorded by the source corpus.

Why are some people rich while others are poor? To what extent can governments affect inequality? Which instruments should they use? Answering these questions requires understanding why people save. Dynamic quantitative models of wealth inequality can help us understand and quantify the determinants of the outcomes that we observe in the data and to evaluate the consequences of policy reform. This paper surveys the savings mechanisms generated by the transmission of bequests and human capital, by preference heterogeneity, by rates of returns heterogeneity, by entrepreneurship, by richer earnings processes, and by medical expenses. It concludes that the transmission of bequests and human capital, entrepreneurship, and medical expense risk are crucial determinants of savings and wealth inequality.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/106aec3e27f9bf2def05b74beb9d865624eb1027

Citations in the corpus

• CENTRAL BANK POLICIES AND INCOME AND WEALTH INEQUALITY: A SURVEY (2019, unknown): “As observed by De Nardi and Fella (2017), the workhorse framework used to study aggregate effects of wealth and income inequality is based on the theory by Bewley (1977).”
• Heterogeneity and Persistence in Returns to Wealth (2018, unknown): “…wealth relative to basic predictions of a life-cycle model (Skinner (2007)).1 What produces the inequality in wealth observed in the data and in particular its extreme right skewness are the subject of intense research (see De Nardi and Fella (2017) for a critical appraisal of the literature).”
• Saving Behavior Across the Wealth Distribution: The Importance of Capital Gains (2019, unknown): “Conditional on age and income, saving rates are slightly decreasing with wealth, as noted by De Nardi and Fella (2017).”