Rapid Dynamics of Top Wealth Shares and Self-Made Fortunes: What is the Role of Family Firms?
Andrew G. Atkeson
- American Economic Review: Insights (Forthcoming)
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.
Forthcoming Article Downloads