We calibrate a sequence of four nested models to study the dynamics of wealth accumulation. Individuals maximize a utility function whose arguments are consumption and investment. They desire to accumulate wealth for its own sake – this is not a life-cycle model. A competitive firm produces a single good from labor and capital; the rate of return to capital and the wage rate are market-clearing. The second model introduces political lobbying by the wealthy, whose purpose is to reduce the tax rate on capital income. The third model introduces differential rates of return to capitals of different sizes. The fourth model introduces inheritance and intergenerational mobility.
Piketty; dynamics of wealth accumulation; intergenerational mobility; Kantian equilibrium;
- D31: Personal Income, Wealth, and Their Distributions
- D58: Computable and Other Applied General Equilibrium Models
- E37: Forecasting and Simulation: Models and Applications
Philippe De Donder, and John E. Roemer, “The dynamics of capital accumulation in the US: Simulations after Piketty”, TSE Working Paper, n. 15-568, April 16, 2015.
Philippe De Donder, and John E. Roemer, “The dynamics of capital accumulation in the US: Simulations after Piketty”, Journal of Economic Inequality, vol. 15, n. 2, June 2017, pp. 121–141.
Journal of Economic Inequality, vol. 15, n. 2, June 2017, pp. 121–141