globale" (Polya) of the past. Second, the model is con
fined to a life-cycle from ri?ho<entrance to exit. But the
relevant stochastic process goes far beyond that. In
fact, when somebody starts in life, his chances of re
ceiving certain incomes are already settled to a large
extent by the condition of his parents: By their wealth,
status, connections, reputation and' the education or training
they have been able to give him. In other words, the exits
and the entries in the life-time model are linked by in
heritance etc., and the process of diffusion continues on
I >
a higher stage. ;
W
to i,iT i
Both arguments point/\the same consequence: We must relate
the chances of getting certain incomes to the amount of
wealth, material and immaterial, and its distribution.
In this way we can link the income to a suitable state
variable (wealth) which is evolving in a long run process
through the generations.
Also, we shall then be able to answer the question why
income distribution is relatively stable, although so many
elements relevant to it are changing day by day; The answer
is that the stability lies in the distribution of wealth,
education, training etc., which change only slowly
X)
.-^2-7 P* ^4-2 seq.
i) Champernowne was, of course, aware of these facts,- as his thesis ^
of 1957 ( $ ) shows. His formalised model of 1953 is, however,
not well suited to reflect all the economic factors so well
stated in general terms in 1937 -