Existence and specific characters of rentiers: a savers-spenders theory approach

Abstract

Using the savers-spenders theory developed by Mankiw (2000, AER), we propose microfoundations to the existence of rentiers in macroeconomic growth models. From an OLG model which acknowledges the great heterogeneity of consumer behavior apparent in the data, we capture the dynamic considerations of potential rentiers as a natural consequence of intertemporal utility maximization and we analyze realistic characteristics (proportion, wealth, propensity to save) of rentiers.

On the role of progressive taxation in a Ramsey model with heterogeneous households

“…For a critical survey, see Attanasio (1999). 20 Note that Thibault (2005) has developed a explanation of population segmentation closely related to ours using an overlapping generations model with heterogeneous altruistic agents. 14 …”

“…Moreover, using (T1), (T3) of Proposition 3, equation (25) and applying the implicit function theorem, we locally dene l 2 ≡ l 2 (k, T l , t l ). 22 Let us start by analyzing the eect of taxes on the aggregate variables K and Y . Using the fact that K = kn 2 l 2 (k, T l , t l ), we get the following proposition:…”

Love thy children or money

“…Such a result holds as soon as there exist some agents with infinite horizon (infinitely lived agents or unconstrained altruistic agents). 2 1 Among the models with "savers" and "spenders" such as presented by Mankiw (2000), let us mention Michel and Pestieau (1998, 1999, 2005 who analyze the effects of alternative fiscal policies (debt, PAYG, estate taxation) in settings where the only heterogeneity is the degree of altruism with fixed or endogenous labor supply or where people vary according to altruism and productivity. Using the same dichotomy "saversspenders", Smetters (1999) analyzes the robustness of the Ricardian equivalence; Nourry and Venditti (2001) study the stability and the determination of the long-run equilibrium; Laitner (2001) tries to explain secular changes in wealth inequality and inheritance in the US and UK data; and Thibault (2005) tries to explain the emergence of rentiers (i.e., of capitalists).…”

“…2 1 Among the models with "savers" and "spenders" such as presented by Mankiw (2000), let us mention Michel and Pestieau (1998, 1999, 2005 who analyze the effects of alternative fiscal policies (debt, PAYG, estate taxation) in settings where the only heterogeneity is the degree of altruism with fixed or endogenous labor supply or where people vary according to altruism and productivity. Using the same dichotomy "saversspenders", Smetters (1999) analyzes the robustness of the Ricardian equivalence; Nourry and Venditti (2001) study the stability and the determination of the long-run equilibrium; Laitner (2001) tries to explain secular changes in wealth inequality and inheritance in the US and UK data; and Thibault (2005) tries to explain the emergence of rentiers (i.e., of capitalists). Alternatively, Lambrecht et al (2006), Rapoport and Vidal (2007), and Alonso-Carrera et al (2008) have introduced new forms of intergenerational altruism in the agents' utility function in order to explain some empirical facts that cannot be reconciled with the traditional models.…”

“…Alternatively, Lambrecht et al (2006), Rapoport and Vidal (2007), and Alonso-Carrera et al (2008) have introduced new forms of intergenerational altruism in the agents' utility function in order to explain some empirical facts that cannot be reconciled with the traditional models. 2 According to Muller and Woodford (1988), Nourry and Venditti (2001) or Thibault (2005), in societies with at least an agent à la Barro-Ramsey, the steady state is always Pareto optimal and the long-run capital stock, driven by the degree of patience (or altruism) of the most patient (or altruistic) agents, is only held by these agents.…”