NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Wealth Distribution in Bewley Models with Investment Risk

Jess Benhabib, Alberto Bisin, Shenghao Zhu

NBER Working Paper No. 20157
Issued in May 2014
NBER Program(s):   EFG

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

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20157

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