Francis, Johanna L. (2007): Wealth and the Capitalist Spirit.
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Abstract
The wealth distribution in the U.S. is more unequal, or skewed to the right, than either the income or earnings distribution, a fact current models of saving behavior have difficulty explaining. Using Max Weber's (1905) idea that individuals may have a `capitalist spirit', I construct and simulate a model where some individuals accumulate wealth for its own sake rather than as deferred consumption. Including capitalist-spirit preferences in the standard 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.
| Item Type: | MPRA Paper |
|---|---|
| Original Title: | Wealth and the Capitalist Spirit |
| Language: | English |
| Keywords: | capitalist spirit, life cycle, wealth |
| Subjects: | D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth |
| Item ID: | 5985 |
| Depositing User: | Johanna Francis |
| Date Deposited: | 28 Nov 2007 00:10 |
| Last Modified: | 27 Sep 2019 12:31 |
| URI: | https://mpra.ub.uni-muenchen.de/id/eprint/5985 |
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