Pugh, Thomas Michael; (2019) Entrepreneurs, Fluctuations and Dynamics within the Wealth Distribution. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

There has been substantial interest in inequality and the distribution of wealth for centuries. After changes beginning in the 1980's, rising income and wealth inequality at the top has become an important item on the policy agenda and in public discussion. This thesis develops the study of wealth inequality in two key directions - rstly, the study and use of mobility in wealth amongst households to understand and discriminate between the mechanisms and theories purporting to explain the highly concentrated distribution of wealth in the upper tail. Secondly, the study of interactions between entrepreneurship, which is prominent amongst the wealthy, and aggregate shocks to the economy. In Chapter One, I investigate wealth data in the UK nd that there is substantial mobility amongst the wealthy and large changes in wealth. In Chapter Two, I use these ndings to estimate a model incorporating multiple theories of the upper wealth distribution and identify that heterogeneity in returns has the best t to the data. In Chapter Three I turn to entrepreneurship, examining the impact of entrepreneurial constraints on the economy when responding to aggregate shocks. I nd evidence of increased dispersion amongst businesses during recessions and use this to calibrate uncertaintyand mobility- increasing `turbulence shocks amongst entrepreneurs. I nd that entrepreneurial behaviour ampli es TFP-style shocks and symmetric turbulence shocks have rich e ects, changing the distribution of wealth and delivering medium term decreased output and a spell of longer term increased output through slow capital reallocation. I conclude that the study of the top of the wealth distribution and entrepreneurship has signi cant implications, in terms of understanding the mechanisms behind inequality and the mechanisms that drive patterns in the business cycle.

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