Entrepreneurship, frictions, and wealth

Entrepreneurship, frictions, and wealth
Marco Cagetti, Marco Cagetti
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Last edited by MARC Bot
December 17, 2020 | History

Entrepreneurship, frictions, and wealth

"Although the role of financial constraints on entrepreneurial choices has received considerable attention, the effects of these constraints on aggregate capital accumulation and wealth inequality are less known. Entrepreneurship is an important determinant of capital accumulation and wealth concentration and, conversely, the distribution of wealth affects entrepreneurial choices in presence of borrowing constraints. We construct a model that matches wealth inequality very well, for both entrepreneurs and non- entrepreneurs. We find that more restrictive borrowing constraints generate less wealth concentration, but also reduce average firm size, aggregate capital, and the fraction of entrepreneurs. We also find that voluntary bequests are an important channel that allows some high-ability workers to establish or enlarge an entrepreneurial activity: with accidental bequests only, there would be fewer large firms, fewer entrepreneurs, and less aggregate capital, but also less wealth concentration"--Federal Reserve Bank of Chicago web site.

Publish Date
Language
English

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Edition Availability
Cover of: Entrepreneurship, frictions, and wealth
Entrepreneurship, frictions, and wealth
2005, Federal Reserve Bank of Chicago
electronic resource / in English
Cover of: Entrepreneurship, frictions and wealth
Entrepreneurship, frictions and wealth
2003, Federal Reserve Bank of Minneapolis, Research Dept.
Electronic resource in English
Cover of: Entrepreneurship, frictions, and wealth
Entrepreneurship, frictions, and wealth
2003, Federal Reserve Bank of Minneapolis
Electronic resource in English

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Book Details


Edition Notes

Title from PDF file as viewed on 10/2/2006.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.

Published in
Chicago, Ill.]
Series
Working paper series -- WP-2005-09, Working paper series (Federal Reserve Bank of Chicago. Research Department : Online) -- WP-2005-09.

Classifications

Library of Congress
HG2401

The Physical Object

Format
[electronic resource] /

Edition Identifiers

Open Library
OL31758811M
LCCN
2006615508

Work Identifiers

Work ID
OL5811308W

Work Description

"Although the role of financial constraints on entrepreneurial choices has received considerable attention, the effects of these constraints on aggregate capital accumulation and wealth inequality are less known. Entrepreneurship is an important determinant of capital accumulation and wealth concentration and, conversely, the distribution of wealth affects entrepreneurial choices in the presence of borrowing constraints. We construct a model that matches wealth inequality very well, for both entrepreneurs and non-entrepreneurs, and find that more restrictive borrowing constraints generate less wealth concentration, but also reduce average firm size, aggregate capital, and the fraction of entrepreneurs. We also find that voluntary bequests are an important channel that allows some high-ability workers to establish or enlarge an entrepreneurial activity: with accidental bequests only, there would be fewer large firms, fewer entrepreneurs, and less aggregate capital, but also less wealth concentration"--Federal Reserve Bank of Minneapolis web site.

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December 17, 2020 Created by MARC Bot Imported from Library of Congress MARC record