Arbeitspapier

Savings externalities and wealth inequality

Incomplete markets models imply heterogeneous household savings behaviour which in turn generates pecuniary externalities via the interest rate. Conditional on differences in the processes determining household earnings for distinct groups in the population, these savings externalities may contribute to inequality. Working with an open economy heterogenous agent model, where the interest rate only partially responds to domestic asset supply, we find that differences in the earnings processes of British households with university and non-university educated heads entail savings externalities that increase wealth inequality between the groups and within the group of the non-university educated households. We further find that while the inefficiency effects of these externalities are quantitatively small, the distributional effects are sizeable.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 7619

Klassifikation
Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Aggregate Factor Income Distribution
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Thema
incomplete markets
productivity differences
savings externalities

Ereignis
Geistige Schöpfung
(wer)
Angelopoulos, Konstantinos
Lazarakis, Spyridon
Malley, Jim
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2019

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Angelopoulos, Konstantinos
  • Lazarakis, Spyridon
  • Malley, Jim
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2019

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