Essays on wealth distribution and tax reform

The first essay applies a panel approach to investigate household wealth accumulation and distribution across lifetime income groups for all existing cohorts. Differentiating lifetime income groups with self-reported wages from the Panel Study of Income Dynamics and imputing missing pension values with multiple-imputation procedure improves previous estimates of lifetime wealth profiles. The findings suggest a very wide dispersion in the distribution of accumulated wealth both across and within lifetime earnings groups.The second essay reviews different methods of modeling the foreign sector and assesses the ways in which the estimated effects of a fundamental tax reform might be altered when different specifications of the foreign sector are utilized.The last essay employs a dynamic overlapping-generations lifecycle computable general equilibrium (LC-CGE) model to evaluate various macroeconomic effects of a Flat Tax reform in a large open economy setting. Simulation results indicate the welfare gains of a Flat Tax reform in a large open economy are about 15-20 percent larger than in a closed economy model with similar structural settings and parameter values. Access to international capital market provides an additional channel through which the domestic economy can expand its capital stock and investment. Also, potential declines in the values of the two non-corporate non-housing sectors during transition could be significant.