The dynamics of capital accumulation in the US: Simulations after Piketty

De Donder, Philippe and Roemer, John E. (2017) The dynamics of capital accumulation in the US: Simulations after Piketty. The Journal of Economic Inequality, 15 (2). pp. 121-141.

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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.

Item Type: Article
Language: English
Date: June 2017
Refereed: Yes
Uncontrolled Keywords: Piketty, dynamics of wealth accumulation, intergenerational mobility, Kantian equilibrium
JEL codes: D31 - Personal Income, Wealth, and Their Distributions
D58 - Computable and Other Applied General Equilibrium Models
E37 - Forecasting and Simulation
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 30 May 2017 12:54
Last Modified: 07 Mar 2018 13:24

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