Full text: Konvolut Wealth and Income Distribution 1

12 
, 
income is unity (thus Y = 0), and the reciprocal rate of 
return is therefore given by ¥. 
jilt should be noted that 
ur 
a doublesided Laplace transform/sould not help us, because 
it could never converge at the empirical values of ©c- /. 
The density of the rate of return will thus be truncated. 
In the case of dependence the truncation will ^ , 
if k <1, because the function f* (W) will be stretchy 
\ 
by a factor 1/k. 
I N. 
There is, however,a deeper reason for the restriction: 
The validity of the Pareto law cannot be assumed for low 
values of ¥ (in fact,for negative values, if we put the 
unit of wealth at a level which limits the range of 
\ N \ A 
linearity of the distribution). / 0wing to the irregular 
ity of the wealth distributing for low values of wealth 
the possibility of very high ra\es of return might disturb 
the regularity of the pattern of Income distribution. ¥e 
musb, therefore, set p limit to the permitted rate of 
return. 
reality the return rates which have been truncated in 
*r exercise may, however, exist. The point is, then, that 
to the extent that they exist - and that will be the more 
likely the smaller k is - the income distribution will be 
less regular than the wealth distribution. In practice 
;his will mean that the range dominated by the Pareto law 
dll be narrower for income than for wealth.
	        

Note to user

Dear user,

In response to current developments in the web technology used by the Goobi viewer, the software no longer supports your browser.

Please use one of the following browsers to display this page correctly.

Thank you.