Risk-Bearing and the Theory of Income Distribution

Banerjee, Abhijit; Newman, Andrew F.

doi:10.2307/2297965

Cited by 230 publications

(148 citation statements)

References 17 publications

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“…Risk aversion leads to inefficient investment, and efficiency would improve with insurance (this idea is explored theoretically in Stiglitz (1969), Kanbur (1979), Kihlstrom and Laffont (1979), Banerjee and Newman (1991), Newman (1995) and Banerjee (2001)). …”

Section: Insurance Market Failuresmentioning

confidence: 99%

Growth Theory through the Lens of Development Economics

2004

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Section: Insurance Market Failuresmentioning

confidence: 99%

Growth Theory through the Lens of Development Economics

2004

Self Cite

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“…We argue that inequality is detrimental to the security of property rights, and therefore to growth, because it enables the rich to subvert the political, regulatory, and legal institutions of 1 There is a large theoretical literature on inequality and growth, including Aghion and Williamson (1998), Alesina and Rodrik (1994), Banerjee and Newman (1991, 1993), Benabou (1996a, 1996b, Murphy, Shleifer, and Vishny (1989), Perotti (1993), Persson and Tabellini (1994), Piketty (1997), and Rajan and Zingales (2002).…”

Section: Introductionmentioning

confidence: 99%

The injustice of inequality

Glaeser

Scheinkman

Shleifer

2003

Journal of Monetary Economics

385

180

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In many countries, the operation of legal, political and regulatory institutions is subverted by the wealthy and the politically powerful for their own benefit. This subversion takes the form of corruption, intimidation, and other forms of influence. We present a model of such institutional subversion -focusing specifically on courts -and of the effects of inequality in economic and political resources on the magnitude of subversion. We then use the model to analyze the consequences of institutional subversion for the law and order environment in the country, as well as for capital accumulation and growth. We illustrate the model with historical evidence from Gilded Age United States and the transition economies of the 1990s. We also present some cross-country evidence consistent with the basic prediction of the model.

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“…Some empirical studies document intergenerational mobility, (see Behrman & Taubman (1990), Solon (1992), and Zimmerman (1992)) while others concentrate on the mobility of the same individual (see Duncan & Morgan (1984), Sawhill & Condon (1992) and Hungerford (1993)). Theoretical approaches typically examine intergenerational mobility (see, for example, Banerjee & Newman (1991, 1993 and Aghion & Bolton (1997)). In contrast, this study is primarily interested in analyzing the mobility properties experienced by different economic agents, namely, enterprising households as compared to other households within one generation.…”

Section: Introductionmentioning

confidence: 99%

Entrepreneurship, Saving, and Social Mobility

Quadrini¹

2000

Review of Economic Dynamics

531

377

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This paper examines entrepreneurship in order to analyze, first, the degree to which the opportunity to start or own a business affects the household's saving behavior and the implication of this behavior for the distribution of wealth and, second, the relationship between the extent of entrepreneurship in the economy and socioeconomic mobility, that is, the movement of families across wealth classes over time.First, a number of stylized facts based on data from the Panel Study of Income Dynamics and the Survey of Consumer Finances are outlined. They show relevant differences in asset holdings and wealth mobility between entrepreneurs and workers. Second, a dynamic general equilibrium model with an explicit formalization of the entrepreneurial choice is developed. Through the modeling of the entrepreneurial activities, the model generates a concentration of wealth similar to the one observed in the U. S. economy and it replicates the main patterns of wealth mobility in which entrepreneurs experience higher upward mobility than workers. (JEL E21,D31,J23)

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Risk-Bearing and the Theory of Income Distribution

Cited by 230 publications

References 17 publications

Growth Theory through the Lens of Development Economics

Growth Theory through the Lens of Development Economics

The injustice of inequality

Entrepreneurship, Saving, and Social Mobility

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