The Wealth Distribution in Bewley Models with Investment Risk
NBER Working Paper No. 20157
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; more precisely, a Pareto distribution in the right tail.
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This paper was revised on July 27, 2014
Document Object Identifier (DOI): 10.3386/w20157
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