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BEGIN:VEVENT
UID:bfc9511008671d94a26b8e182cbe27b9
CATEGORIES:Seminars
CREATED:20150211T181030
SUMMARY:Marnix Amand - HEC Lausanne
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:<p style="line-height: normal; text-align: justify;"><strong><span style="f
 ont-size: 12pt; font-family: 'Times New Roman','serif';">Entrepreneurship, 
 Firm Sales and the Dynamics of the Wealth Distribution</span></strong></p><
 p style="line-height: normal; text-align: justify;"><span style="font-size:
  12pt; font-family: 'Times New Roman','serif';">Abstract:</span></p><p styl
 e="line-height: normal; text-align: justify;"><span style="font-size: 12pt;
  font-family: 'Times New Roman','serif';">This paper studies the dynamics o
 f the wealth distribution in a heterogeneous agent economy with entrepreneu
 rship. Using a novel panel dataset of household wealth, I study how stable 
 the top of the wealth distribution is, and the characteristics of household
 s that move into the top of the wealth distribution. I show that (1) househ
 olds move in and out of the top of the wealth distribution at high frequenc
 ies - e.g., up to 15% of households in the top-5% in a given year were not 
 present the previous year; (2) a third of those households display “wealth 
 jumps”, i.e., sudden large increases in wealth; (3) entrepreneurs are vastl
 y overrepresented in the top of the wealth distribution and among the upwar
 dly mobile households. More generally, being an entrepreneur greatly increa
 ses the probability of being or becoming a millionaire. The first two facts
  are at odds with existing quantitative models of the wealth distribution, 
 which do not allow for wealth jumps and display very slow wealth accumulati
 on processes. The last fact motivates the second part. The literature has s
 hown that entrepreneurs are an essential element in explaining the wealth d
 istribution. However, they were modeled as “lifetime entrepreneurs”, stuck 
 with their firm for life and patiently accumulating wealth. This allows for
  neither wealth jumps nor frequent movements in wealth. I construct a quant
 itative model where entrepreneurs have the opportunity to sell their firm. 
 In general equilibrium, I show that this model replicates the known facts o
 f the wealth distribution as well as previous work, and also the new styliz
 ed facts described above. The policy relevance of this work lies in the tax
  consequences: it is essential to correctly model the incentives and dynami
 cs of wealth creation when considering a tax on wealth. This work shows tha
 t even in partial equilibrium (i.e., neglecting the effects on the interest
  rate), a wealth tax can have negative effects by limiting the leverage ent
 repreneurs can access, and this effect weakens with better financial market
 s.</span></p>
DTSTAMP:20260421T151254Z
DTSTART:20141117T173000Z
DTEND:20141117T190000Z
SEQUENCE:0
TRANSP:OPAQUE
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