How Do Stock Market Experiences Shape Wealth Inequality?

  • 研討會日期 : 2021-01-27
  • 時間 : 10:30
  • 主講人 : Dr. Xiaowen Lei
  • 主持人 : Professor Wan-Jung Cheng
  • 地點 : online
  • 演講者簡介 : Dr. Lei received her Ph.D. in Economics from Simon Fraser University in 2018. She is currently a Postdoctoral Prize Research Fellow in Economics at University of Oxford. Her research field are Macroeconomics, Monetary Economics, and Inequality. She is applying for a position of the Institute of Economics, Academia Sinica now.
  • 演講摘要 : This paper develops a continuous-time overlapping generations model with rare disasters and learning-from-experience agents. Disasters such as the Great Depression permanently scar investors’ trust in the market. As a consequence, generations that have experienced disasters save in the form of safer portfolios, even if similar disasters are not likely to happen again in their lifetimes. ‘Fearing to attempt’ therefore inhibits wealth accumulation by these “depression babies” relative to other generations. This effect is amplified in general equilibrium, because the equity premium is relatively high following a disaster. When calibrated to US data, the model can explain 12% to 21% of the recent changes in generational wealth inequality.