Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
The paper presents a model of income distribution that makes use of Gibrat's law of proportionate effect to explain the way income is distributed and how the distribution changes over time in a population made of families characterized by a specific life cycle and initial endowment. The stochastic factor in each period is shown to be the result of deliberate choices by individual decision-makers regarding their savings, investment, and bequests given their inherited wealth and natural ability. The source of randomness is two-fold: uncertainty about the rates of return and randomness of the distribution of natural skills.