Rapid Dynamics of Top Wealth Shares and Self-Made Fortunes: What Is the Role of Family Firms?
- (pp. 409-24)
Abstract
We derive an analytical link between the fast dynamics of inequality at the top of the wealth distribution and the prevalence of newly created fortunes. Specifically, in the context of a random growth model of wealth accumulation, the shape of the top of the wealth distribution changes rapidly only if the pace with which new fortunes are created is fast. Quantitatively, the decision of a few families to bear a large amount of idiosyncratic risk in the form of family firms is crucial in accounting for both the prevalence of new fortunes and the dynamics of top wealth inequality.Citation
Atkeson, Andrew G., and Magnus Irie. 2022. "Rapid Dynamics of Top Wealth Shares and Self-Made Fortunes: What Is the Role of Family Firms?" American Economic Review: Insights, 4 (4): 409-24. DOI: 10.1257/aeri.20210560Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D31 Personal Income, Wealth, and Their Distributions
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- L25 Firm Performance: Size, Diversification, and Scope