Tony Smith, Yale University
Department seminar. Tony Smith is a Professor of Economics at Yale University. He will present a paper entitled "The Historical Evolution of the Wealth-Distribution: A Quantitative-Theoretic Investigation", co-authored by Joachim Hubmer and Per Krusell.
This paper employs the benchmark heterogeneous-agent macroeconomic model to examine drivers of the rise in wealth inequality in the U.S. over the last thirty years. By far the most important driver is the signiﬁcant drop in tax progressivity starting in the late 1970s. The sharp observed increases in earnings inequality and the falling labor share over the recent decades, on the other hand, fall far short of accounting for the data. Changes in asset returns and in the inﬂation rate help to account for the shorter-run dynamics in wealth inequality.
Read the full paper here [pdf]
Host: Kjetil Storesletten