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Rentier premium and wealth inequality

Author

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  • Jangyoun Lee

    (Bank of Korea)

Abstract

Why do some people stay wealthy while others remain poor? Based on the empirical evidence of persistently heterogeneous returns on wealth across households, this study introduces the 'rentier premium' into the standard heterogeneous agents dynamic stochastic general equilibrium model. This tractable model shows that the rentier premium has acted as a key driver in rising wealth inequality in the United States since the 1980s.

Suggested Citation

  • Jangyoun Lee, 2021. "Rentier premium and wealth inequality," Economics Bulletin, AccessEcon, vol. 41(3), pages 1994-2002.
    • Handle: RePEc:ebl:ecbull:eb-21-00446
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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I3-P169.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lee, Jangyoun, 2021. "Behind rising inequality and falling growth," Journal of Macroeconomics, Elsevier, vol. 70(C).
    2. Sadeghi Amroabadi, Behrouz, 2022. "Analyzing the Asymmetric Cumulative Effects of Rentier State on Income Inequality in Mena Countries," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 9(3), pages 113-146, December.

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    More about this item

    Keywords

    wealth inequality; rentier premium; heterogeneous agents DSGE;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models

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