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An OLG model with endogenous but distinct power-laws in earnings and wealth

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  • Lopez-Velasco, Armando R.

Abstract

An OLG model generates distinct but related power laws for wages, earnings, and wealth. CES-labor technology drives top-wage and top-earnings inequality, while top-wealth inequality stems from higher returns to wealthier agents which in turn amplifies top-earnings inequality.

Suggested Citation

  • Lopez-Velasco, Armando R., 2025. "An OLG model with endogenous but distinct power-laws in earnings and wealth," Economics Letters, Elsevier, vol. 257(C).
    • Handle: RePEc:eee:ecolet:v:257:y:2025:i:c:s0165176525005555
    DOI: 10.1016/j.econlet.2025.112718
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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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