Journal Article10.1111/J.1475-4991.2007.00242.X
A two factor model of income distribution dynamics
Makoto Nirei,Wataru Souma +1 more
TL;DR: This paper analyzed empirical income distributions and proposed a simple stochastic model to explain the stationary distribution and deviations from it using individual tax returns data in the U.S. and Japan for 40 years.
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Abstract: This paper analyzes empirical income distributions and proposes a simple stochastic model to explain the stationary distribution and deviations from it. Using the individual tax returns data in the U.S. and Japan for 40 years, we first summarize the shape of the income distribution by an exponential decay up to about the 90th percentile and a power decay for the top 1 percent. We then propose a minimal stochastic process of labor and asset income to reproduce the empirical characteristics. In particular, the Pareto exponent is derived analytically and matched with empirical statistics.
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Modelling the income distribution in the European Union: An application for the initial analysis of the recent worldwide financial crisis
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TL;DR: In this article, the authors used the extended Yakovenko et al. (EY) model to give an analytical description of the annual household incomes of all society classes in the European Union (i.e., low-, medium-, and high-income ones) by a single unified formula based on unified formalism.
3
Memoryless Property of the Income Distribution as an Indication for Testing the Equality of Opportunity: Evidence from China (1978-2015)
Johan Höglund
- 15 Mar 2023
TL;DR: In this article , the authors identify the emergence of an exponential income distribution as a potential necessary condition for guaranteeing the equality of opportunity, together with other conditions such as social and economic mobility, it would promote equal opportunities for income acquisition among citizens.
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Decentralized Decisions and Technological Progress: A Formal Proof
Yong Tao
- 21 Jul 2021
TL;DR: It is strictly prove that, if the income structure of an economy obeys an exponential distribution, the income summation over all households leads to an aggregate production function with Hicks-neutral-like technical progress, in which the technology factor is exactly equal to society’s information stock that is a result of combining all of decentralized decisions.
References
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Income Inequality in the United States, 1913–1998
Thomas Piketty,Emmanuel Saez +1 more
TL;DR: The authors showed that the large shocks that capital owners experienced during the Great Depression and World War II have had a permanent effect on top capital incomes and argued that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks.
On a class of skew distribution functions
TL;DR: In this paper, the authors analyse a class of distribution functions that appear in a wide range of empirical data-particularly data describing sociological, biological and economic phenomena-and look for an explanation of the observed close similarities among the five classes of distributions listed above.
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Income and Wealth Heterogeneity in the Macroeconomy
Per Krusell,Anthony A. Smith +1 more
TL;DR: In this paper, a calibrated version of the stochastic growth model with partially uninsurable idiosyncratic risk and movements in aggregate productivity is used to analyze how movements in the distribution of income and wealth affect the macroeconomy.