Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
965999 | Journal of Macroeconomics | 2009 | 15 Pages |
Abstract
The wealth distribution in the U.S. is more unequal than either the income or earnings distribution, a fact current models of saving behavior have difficulty explaining. Using Max Weber's [Weber, M. (1905). The Protestant Ethic and the Spirit of Capitalism. Charles Scribners' and Sons (1958 translated edition)] idea that individuals may have a 'capitalist spirit', I construct and simulate a model where individuals accumulate wealth for its own sake rather than as deferred consumption. Including capitalist spirit preferences in a simple life cycle model, with no other modifications, generates a skewness of wealth consistent with that observed in the U.S. economy. Furthermore, capitalist spirit preferences provide a way to generate decreasing risk aversion with increases in wealth without resorting to idiosyncratic rates of time preference.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Johanna L. Francis,