Working Paper
Taxation, entrepreneurship, and wealth
De Nardi, Mariacristina; Cagetti, Marco (2006)
Entrepreneurship is a key determinant of investment, saving, and wealth inequality. We study the aggregate and distributional effects of several tax reforms in a model that recognizes this key role and that matches the large wealth inequality observed in the U.S. data. The aggregate effects of tax reforms can be particularly large when they affect small and medium-sized businesses, which face the most severe financial constraints, rather than big businesses. The consequences of changes in the estate tax depend heavily on the size of its exemption level. The current effective estate tax system ...
Working Paper Series , Paper WP-06-07

Working Paper
Taxation, entrepreneurship and wealth
De Nardi, Mariacristina; Cagetti, Marco (2004)
Entrepreneurship is a key determinant of investment, saving, wealth holdings, and wealth inequality. We study the aggregate and the distributional effects of several tax reforms in a model that recognizes the key role played by the entrepreneurs, and that matches very well the extreme degree of wealth inequality observed in the U.S. data. We find that the effects of tax reforms on output and capital formation can be particularly large when they affect the majority of small and medium-size businesses, which face the most severe financial constraints, rather than a small number of big ...
Working Papers , Paper 632

Working Paper
Entrepreneurship, frictions and wealth
De Nardi, Mariacristina; Cagetti, Marco (2003)
Although the role of financial constraints on entrepreneurial choices has received considerable attention, the effects of these constraints on aggregate capital accumulation and wealth inequality are less known. Entrepreneurship is an important determinant of capital accumulation and wealth concentration and, conversely, the distribution of wealth affects entrepreneurial choices in presence of borrowing constraints. We construct a model that matches wealth inequality very well, both for entrepreneurs and non-entrepreneurs, and find that more restrictive borrowing constraints generate less ...
Working Papers , Paper 620

Working Paper
Credit crunches and credit allocation in a model of entrepreneurship
De Nardi, Mariacristina; Bassetto, Marco; Cagetti, Marco (2013)
We study the effects of credit shocks in a model with heterogeneous entrepreneurs, financing constraints, and a realistic firm size distribution. As entrepreneurial firms can grow only slowly and rely heavily on retained earnings to expand the size of their business in this set-up, we show that, by reducing entrepreneurial firm size and earnings, negative shocks have a very persistent effect on real activity. In determining the speed of recovery from an adverse economic shock, the most important factor is the extent to which the shock erodes entrepreneurial wealth.
Working Paper Series , Paper WP-2013-06

Discussion Paper
Federal Debt in the Financial Accounts of the United States
Ogden, Rick; Hoops, Matthew; Cagetti, Marco; McIntosh, Susan Hume (2015-10-08)
This note explains the concept of federal debt in the Financial Accounts of the United States, how it has recently changed, and how it differs from other commonly cited measures of federal debt. As described below, a key factor is the treatment of intragovernmental holdings of U.S. debt securities.
FEDS Notes , Paper 2015-10-08-1

Report
Taxation, entrepreneurship, and wealth
De Nardi, Mariacristina; Cagetti, Marco (2004)
Entrepreneurship is a key determinant of investment, saving, and wealth inequality. We study the aggregate and distributional effects of several tax reforms in a model that recognizes this key role and that matches the large wealth inequality observed in the U.S. data. The aggregate effects of tax reforms can be particularly large when they affect small and medium-sized businesses, which face the most severe financial constraints, rather than big businesses. The consequences of changes in the estate tax depend heavily on the size of its exemption level. The current effective estate tax system ...
Staff Report , Paper 340

Report
Entrepreneurship, frictions, and wealth
De Nardi, Mariacristina; Cagetti, Marco (2003)
Although the role of financial constraints on entrepreneurial choices has received considerable attention, the effects of these constraints on aggregate capital accumulation and wealth inequality are less known. Entrepreneurship is an important determinant of capital accumulation and wealth concentration and, conversely, the distribution of wealth affects entrepreneurial choices in the presence of borrowing constraints. We construct a model that matches wealth inequality very well, for both entrepreneurs and non-entrepreneurs, and find that more restrictive borrowing constraints generate less ...
Staff Report , Paper 322

Working Paper
The integrated macroeconomic accounts of the United States
McIntosh, Susan Hume; Wasshausen, David; Holmquist, Elizabeth Ball; Lynn, Lisa; Cagetti, Marco (2012)
The integrated macroeconomic accounts (IMAs), produced jointly by the Bureau of Economic Analysis (BEA) and the Federal Reserve Board (FRB), present a sequence of accounts that relate income, saving, investment in real and financial assets, and asset revaluations to changes in net worth. In this paper we first provide some background information on the IMAs and on their construction. Next, we discuss the usefulness of the IMAs, focusing for instance on the evolution of household net worth and its components, a set of series that has appeared frequently in discussions of the causes and effects ...
Finance and Economics Discussion Series , Paper 2012-81

Working Paper
Estate taxation, entrepreneurship, and wealth
De Nardi, Mariacristina; Cagetti, Marco (2007)
We study the effects of abolishing estate taxation in a quantitative and realistic framework that includes the key features that policy makers are worried about: business investment, borrowing constraints, estate transmission, and wealth inequality. We use our model to estimate effective estate taxation. We consider various tax instruments to reestablish fiscal balance when abolishing estate taxation. We find that abolishing estate taxation would not generate large increases in inequality, and would, in some cases, generate increases in aggregate output and capital accumulation. If, however, ...
Working Paper Series , Paper WP-07-08

Working Paper
Entrepreneurship, frictions, and wealth
De Nardi, Mariacristina; Cagetti, Marco (2005)
Although the role of financial constraints on entrepreneurial choices has received considerable attention, the effects of these constraints on aggregate capital accumulation and wealth inequality are less known. Entrepreneurship is an important determinant of capital accumulation and wealth concentration and, conversely, the distribution of wealth affects entrepreneurial choices in presence of borrowing constraints. We construct a model that matches wealth inequality very well, for both entrepreneurs and non- entrepreneurs. We find that more restrictive borrowing constraints generate less ...
Working Paper Series , Paper WP-05-09