A micro perspective on r > g

Iacono, Roberto and Palagi, Elisa (2022) A micro perspective on r > g. International Inequalities Institute Working Papers (78). International Inequalities Institute, London School of Economics and Political Science, London, UK.

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Abstract

By exploiting large-scale administrative data on estimated gross and net personal wealth in Norway from 2010 to 2018, this paper establishes the first microlevel analysis of the difference between the real return on wealth and the real growth rate of total pretax income across the entire net wealth distribution. We show that for the top 40% of the distribution, aggregate R − G underestimates its micro counterpart r − g, while the opposite happens for the bottom 60%, indicating that micro r−g qualifies as a more precise measure to analyze the dynamics of income and wealth inequality thoroughly.

Item Type:	Monograph (Working Paper)
Official URL:	https://www.lse.ac.uk/International-Inequalities/P...
Additional Information:	© 2022 The Authors
Divisions:	International Inequalities Institute
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	D - Microeconomics > D3 - Distribution > D30 - General D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions D - Microeconomics > D3 - Distribution > D33 - Factor Income Distribution
Date Deposited:	23 Mar 2022 11:03
Last Modified:	15 Sep 2023 23:56
URI:	http://eprints.lse.ac.uk/id/eprint/114442

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