It is well accepted that households increase consumption of goods and services in response to an unexpected increase in wealth. Consensus estimates of this wealth effect are in the range of 3 to 5 cents of additional consumption spending in the long run for each additional dollar of wealth....

This paper examines the impact of estate taxes on saving in a series of models that posit different motivations for transfers between parents and children. We show that the effects of the tax on saving depend on why donors give bequests. In addition, under each motive examined - bequests as...

This paper explores how altruistic parents structure transfer rules in response to potential incentive problems and how the investment behavior of children is influenced by these transfer policies. To investigate these issues, I develop a dynamic model of altruistic transfers in which transfers...