Inherited vs Self-Made Wealth: Theory and Evidence from a Rentier Society (Paris 1872-1937)

This paper divides the population into two groups: the "inheritors" or "rentiers" (whose wealth is smaller than the capitalized value of their inherited wealth, i.e. who consumed more than their labor income during their lifetime); and the "savers" or "self-made men" (whose wealth is larger than the capitalized value of their inherited wealth, i.e. who consumed less than their labor income). Applying this simple theoretical model to a unique micro data set on inheritance and matrimonial property regimes, we find that Paris in 1872-1937 looks like a prototype "rentier society". Rentiers made about 10% of the population of Parisians but owned 70% of aggregate wealth. Rentier societies thrive when the rate of return on private wealth ris permanently and substantially larger than the growth rate g (say, r=4%-5% vs g=1%-2%). This was the case in the 19th century and early 20th century and is likely to happen again in the 21st century. In such cases top successors, by consuming part of the return to their inherited wealth, can sustain living standards far beyond what labor income alone would permit.rentier society ;

Next generation software environments : principles, problems, and research directions

The past decade has seen a burgeoning of research and development in software environments. Conferences have been devoted to the topic of practical environments, journal papers produced, and commercial systems sold. Given all the activity, one might expect a great deal of consensus on issues, approaches, and techniques. This is not the case, however. Indeed, the term "environment" is still used in a variety of conflicting ways. Nevertheless substantial progress has been made and we are at least nearing consensus on many critical issues.The purpose of this paper is to characterize environments, describe several important principles that have emerged in the last decade or so, note current open problems, and describe some approaches to these problems, with particular emphasis on the activities of one large-scale research program, the Arcadia project. Consideration is also given to two related topics: empirical evaluation and technology transition. That is, how can environments and their constituents be evaluated, and how can new developments be moved effectively into the production sector

Inherited vs Self-Made Wealth: Theory and Evidence from a Rentier Society (Paris 1872-1937)

This paper divides the population into two groups: the "inheritors" or "rentiers" (whose wealth is smaller than the capitalized value of their inherited wealth, i.e. who consumed more than their labor income during their lifetime); and the "savers" or "self-made men" (whose wealth is larger than the capitalized value of their inherited wealth, i.e. who consumed less than their labor income). Applying this simple theoretical model to a unique micro data set on inheritance and matrimonial property regimes, we find that Paris in 1872-1937 looks like a prototype "rentier society". Rentiers made about 10% of the population of Parisians but owned 70% of aggregate wealth. Rentier societies thrive when the rate of return on private wealth ris permanently and substantially larger than the growth rate g (say, r=4%-5% vs g=1%-2%). This was the case in the 19th century and early 20th century and is likely to happen again in the 21st century. In such cases top successors, by consuming part of the return to their inherited wealth, can sustain living standards far beyond what labor income alone would permit

Household Saving in Germany: Results of the first SAVE study

Germany is an interesting country to study saving among older households since nearly everyone - whether in the middle income bracket or richer - saves substantial amounts in old age. Only households in the lowest quarter of the income distribution spend more between the ages of 60 and 75 than they save. Our paper exploits newly collected data, the first wave of the so-called SAVE panel, specifically collected to understand economic, psychological and sociological determinants of saving. Overall, we find extraordinarily stable savings patterns. More than 40% of German households save regularly a fixed amount. About 25% of German households plan their savings and have a clearly defined savings target in mind. Most of German household saving is in the form of contractual saving, such as saving plans, whole life insurance and building society contracts. This makes the flow of saving rather unresponsive to economic fluctuations, such as income shocks. Most households prefer to cut consumption if ends do not meet. In particular the elderly do not like to use credit cards, and they eschew debt. We suspect large cohort differences and will study them once further waves of the SAVE panel will become available.

Equality, Liberty, and a Fair Income Tax

This Article summarizes various formal theories of justice and of income taxation. It explores the nature of the American perception of justice. First, it provides an overview of the two political concepts that have shaped our country—liberty and equality. It then summarizes the American tradition, labeled moral economic individualism, that articulates the meanings of liberty and equality that resonate most strongly within the national psyche. It surveys empirical evidence of American beliefs about distributive justice and taxation. The Article concludes that American beliefs in liberty and equality support a mildly progressive hybrid income-consumption tax, rather than a pure income tax or a flat-rate consumption tax. Such a tax acknowledges the pluralistic meanings of liberty and equality under the unifying umbrella of a fluid and flexible conception of fair tax

Schumpeter on money, banking and finance: An institutionalist perspective

In this paper, we provide an institutional interpretation of Schumpeter's analysis of money, banking and finance. This interpretation is founded on an overall investigation into Schumpeter's writings addressing those issues from different perspectives.In section 1, we discuss the widespread evolutionist interpretation of Schumpeter and rather assert an institutionalist perspective. In support of our interpretation, we highlight the specific role played by economic sociology in Schumpeter's methodological approach. Economic sociology, indeed, provides the foundations of a theory of institutions and institutional change, which is often undermined by the usual evolutionary interpretation. We believe, however, that taking this dimension seriously into account may have implications for our understanding of economic and institutional change in Schumpeter. Section 2 illustrates this general statement by focusing on Schumpeter's analysis of money, banking and finance, and their respective roles in the process of economic development.Schumpeter; Money; Credit, Financial system, Institutional change; Economic sociology