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SAVINGS, INTERGENERATIONAL TRANSFERS, AND THE DISTRIBUTION OF WEALTH

Published online by Cambridge University Press:  24 March 2006

IGNACIO PONCE OCAMPO  and
KAZUHIRO YUKI
IGNACIO PONCE OCAMPO
Affiliation:
Goldman Sachs, London
KAZUHIRO YUKI
Affiliation:
Kyoto University
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Abstract

This paper investigates the quantitative importance of different savings motives on the distributions of wealth and consumption and aggregate capital accumulation by solving an overlapping generations model with intragenerational heterogeneity. Agents differ in age, ability, earnings shocks, and inherited bequests. In the baseline economy, there are uninsurable idiosyncratic risks associated with uncertain lifetime and earnings shocks. The model is calibrated to the U.S. economy and solved numerically. Then the allocations of the baseline economy are compared with those of an economy with complete annuity markets, one without earnings uncertainty, and one without altruism.

Keywords

SavingsIntergenerational TransfersWealth Distribution
Type
ARTICLES
Information
Macroeconomic Dynamics , Volume 10 , Issue 3 , June 2006 , pp. 371 - 414
Copyright
© 2006 Cambridge University Press

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