Using a simple model of family decision making we examine the processes by which the wealth distribution changes over the generations, focusing in particular on the division of fortunes through inheritance and the union of fortunes through marriage. We show that the equilibrium wealth distribution can be characterized in a simple way for a variety of inheritance rules and marriage patterns. The shape of the distribution is principally determined by the size distribution of families. We show how changes in fertility, inheritance rules and inheritance taxation a ect long-run inequality.
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