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The Wealth Distribution in Bewley Models with Investment Risk

  • Jess Benhabib
  • Alberto Bisin
  • Shenghao Zhu

We study the wealth distribution in Bewley economies with idiosyncratic capital income risk. We show analytically that under rather general conditions on the stochastic structure of the economy, a unique ergodic distribution of wealth displays a fat tail; more precisely, a Pareto distribution in the right tail.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20157.

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Date of creation: May 2014
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Handle: RePEc:nbr:nberwo:20157
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