The publication of the book Capital in the Twenty-First Century by Piketty helped to increase the debate about the prospects of the evolution of income and wealth inequality in this century. One of the main controversies is about the effects to the income and wealth inequalities of a decrease in...

We document in US data that returns to wealth across households are significantly heterogeneous, and persistently so. Motivated by this observation, we build a tractable general equilibrium model where households face persistent idiosyncratic returns to study the US wealth distribution. We show...

Japan is in the midst of a protracted spell of depressed economic activity. Japan's economic stagnation has occurred against a background of rising earnings risk. Occupational stability is falling as routine occupations disappear and implicit lifetime employment guarantees are gradually...

We analytically show that a common across rich/poor individuals Stone-Geary utility function with subsistence consumption in the context of a simple two-asset portfolio-choice model is capable of qualitatively and quantitatively explaining: (i) the higher saving rates of the rich, (ii) the...

This paper studies the effects of heterogeneity in planning propensity on wealth inequality and asset prices. I consider an economy populated by attentive and inattentive agents. Attentive agents plan their consumption period by period, while inattentive agents plan every other period....

This paper investigates the effect of private pensions on the retirement wealth distribution. The model incorporates stochastic private pension coverage into a lifecycle model with stochastic earnings. The predictions of the calibrated model are compared to the distribution of retirement net...

This paper reconciles neoclassical models of economic growth (Solow) with the formation of social classes during economic transition (Marx). An environment with missing capital markets and no labor divisibility is shown to lead to a steady state with no aggregate inefficiencies, but a very...

This paper studies the determinants of inequality in an infnitehorizon general equilibrium model. Missing capital markets decreases motivations for capital accumulation among the poor, while uncertainty about future income leads to precautionary savings. The different returns to saving faced by...

This paper finds that individuals in Japan do not leave very significant bequests, that parents often require a quid pro quo for bequests to their children, and that wealthier individuals leave less bequests, meaning that bequests ameliorate wealth inequalities.

Much of the macroeconomics literature dealing with wealth distribution has become abstracted from modeling housing explicitly. This paper investigates the properties of the wealth distribution and the portfolio composition regarding housing and equity holdings and their relationship to...