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Wealth Dynamics in Communities
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DOI：10.1093/restud/rdac057.png)
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Abstract
En 中文
This article develops a model to explore how favour exchange influences wealth dynamics. We identify a key obstacle to wealth accumulation: wealth crowds out favour exchange. Therefore, households must choose between growing their wealth and accessing favour exchange. We show that low-wealth households rely on favour exchange at the cost of having tightly limited long-term wealth. As a result, initial wealth disparities persist and can even grow worse. We then explore how communities and policymakers can overcome this obstacle. Using simulations, we show that community benefits and place-based policies can stimulate both saving and favour exchange, and in some cases, can even transform favour exchange into a force that accelerates wealth accumulation.
Keywords:
Favour exchange
Wealth dynamics
Under-investment
Inequality
C73
D15
D31
O17
Journal
IF:
6.4
Papers:
2.5K
Citations:
2.1W