Within the context of the neoclassical growth model I investigate the implications of (initial) endowment inequality when the rich have a higher marginal savings rate than the poor. More unequal societies grow faster in the transition process, and therefore exhibit a higher speed of convergence....

We construct a neoclassical growth model with heterogeneous households that accounts for the Pareto distributions of income and wealth in the upper tail. In an otherwise standard Bewley model, we feature households' business productivity risks and borrowing constraints, which we find generate...