Title

The Dynamics of Capital Accumulation in the US: Simulations after Piketty

Document Type

Discussion Paper

Publication Date

4-1-2015

CFDP Number

1998

CFDP Pages

47

Abstract

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.

This document is currently not available here.

Share

COinS