Is Piketty’s ‘Second Law of Capitalism’ fundamental?

Per Krusell, Tony Smith, 1 June 2014

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Over the last several weeks, we have thought quite a bit about the main message in Thomas Piketty’s now world-famous book, Capital in the Twenty-First Century (Piketty 2014). We have also discussed it at great length with colleagues.

Topics: Poverty and income inequality
Tags: growth, Inequality, saving, savings, wealth

Why Asian firms hold cash

Charles Yuji Horioka, Akiko Terada-Hagiwara, 25 January 2014

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In many, if not most, economies, sharp declines in household saving rates have been offset by sharp increases in corporate saving rates for the past two decades (see, for example, Karabarbounis and Neiman 2012). Even so, relatively little research has been done on the determinants of corporate saving.

Topics: Financial markets
Tags: Asia, borrowing constraints, corporate saving, financial frictions, investment, saving, savings

Nudges to nudge up the savings rate

James Choi, Emily Haisley, Jennifer Kurkoski, Cade Massey, 28 March 2012

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There is widespread concern that individuals do not save enough for retirement because they are financially illiterate (Lusardi and Mitchell 2007, Bucher-Koenen and Lusardi 2011) or suffer from self-control problems (Angeletos et al 2001).

Topics: Frontiers of economic research, Labour markets
Tags: Behavioural economics, nudging, Retirement, saving

Welfare payments, liquidity constraints, and crime

Fritz Foley, 5 August 2008

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Consider an individual who receives support from welfare payments that occur once a month. Several recent papers indicate that this individual is likely to spend this income soon after receiving it and to face severe liquidity constraints.

Topics: Welfare state and social Europe
Tags: consumption smoothing, crime, liquidity constraints, Poverty, saving, US, welfare

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