The Wealth Distribution in Bewley Models with Investment Risk
35 Pages Posted: 28 Jul 2014 Last revised: 29 Jan 2023
Date Written: May 2014
Abstract
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.
Suggested Citation: Suggested Citation
Benhabib, Jess and Bisin, Alberto and Zhu, Shenghao, The Wealth Distribution in Bewley Models with Investment Risk (May 2014). NBER Working Paper No. w20157, Available at SSRN: https://ssrn.com/abstract=2472759
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