Item Type: Note Date: Wednesday, 5 Aug 2020 The Department of Economics, JKU Linz, cordially invites you to the online research seminar Wednesday, 8th of August. 2020, 4pm Dan Barron (Kellogg School of Management at Northwestern University), https://www.kellogg.northwestern.edu/faculty/directory/barron_daniel.aspx Wealth Dynamics in Communities Abstract: This paper studies wealth accumulation in communities. We develop a model of favor exchange among households in a community and their investment decisions. Our result identies a key obstacle to wealth accumulation: wealth crowds out favor exchange. Thus, households underinvest, since growing their wealth would entail losing the support of the community. The result is a persistent wealth gap between such communities and the rest of the economy. Using numerical simulations, we show that increased productivity outside the community exacerbates underinvestment inside the community, while strengthening kinship, friendship, or religious ties within the community encourages wealth accumulation. Please see https://www.jku.at/en/department-of-economics/research/research-events/onlin... <https://www.jku.at/en/department-of-economics/research/research-events/online-economics-research-seminar/> for registration and upcoming presentations. Best regards, René Böheim -- PD René Böheim, PhD Department of Economics JOHANNES KEPLER UNIVERSITÄT LINZ Altenberger Straße 69 4040 Linz, Österreich P +43-732-2468-7369 www.econ.jku.at/boeheim Research: http://ideas.repec.org/e/pbh15.html