[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/adr/anecst/y2024i155p45-90.html
   My bibliography  Save this article

The Wealth Distribution in a Precautionary Savings Model with Capital Income Risk

Author

Listed:
  • Hoang Khieu
  • Roberto Leon-Gonzalez
Abstract
Explaining the evolution of the wealth distribution requires understanding the dynamics of consumption and savings. We analyze the dynamics of consumption and savings under uncertainty in labour income and the rate of return on wealth, which are two-state continuous time Markov processes. The rate of return is persistent and has a right-skewed distribution. We show that the wealth accumulation process has a stationary distribution if the (unconditional) expected change in the rate of return is sufficiently small or large. In particular, when the expected change in the rate of return is moderate, the wealth accumulation process is non-stationary.

Suggested Citation

  • Hoang Khieu & Roberto Leon-Gonzalez, 2024. "The Wealth Distribution in a Precautionary Savings Model with Capital Income Risk," Annals of Economics and Statistics, GENES, issue 155, pages 45-90.
    • Handle: RePEc:adr:anecst:y:2024:i:155:p:45-90
    DOI: 10.2307/48795037
    as

    Download full text from publisher

    File URL: https://www.jstor.org/stable/48795037
    Download Restriction: no
    File URL: https://libkey.io/10.2307/48795037?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Dynamics of Wealth and Consumption; Stationary Wealth Distribution; Capital and Labour Income Risk; Precautionary Savings;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adr:anecst:y:2024:i:155:p:45-90. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Secretariat General or Laurent Linnemer (email available below). General contact details of provider: https://edirc.repec.org/data/ensaefr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.