Economic Interpretations of Intergenerational Correlations
Since accurate prediction ultimately determines the usefulness of theory, our paper gives the reader a taste of some predictions derived from economic theory and some empirical successes and failures. We provide only a taste, because there are a great many economic models relevant to intergenerational correlations — such as models of educational attainment, neighborhood effects in schooling, family formation and fertility choice, occupational choice and discrimination — and quite a variety of predictions that might be derived from these models. However, a simple model of investment and intergenerational decision making can be interpreted as a conceptual aggregation of many more detailed economic models. We present such a model and from it derive one class of predictions that has received substantial attention in the empirical literature — the role of endowments and credit markets in determining intergenerational correlations.
Year of publication: |
2002
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Authors: | Grawe, Nathan D. ; Mulligan, Casey B. |
Published in: |
Journal of Economic Perspectives. - American Economic Association - AEA. - Vol. 16.2002, 3, p. 45-58
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Publisher: |
American Economic Association - AEA |
Saved in:
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