02496cas a2200277 a 4500 AALejournalIMF018663 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484370063 1018-5941 BD-DhAAL BD-DhAAL Fagereng, Andreas. Heterogeneity and Persistence in Returns to Wealth / Andreas Fagereng, Luigi Guiso, Davide Malacrino, Luigi Pistaferri. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (69 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway's administrative tax records. We document a number of novel results. First, during our sample period individuals earn markedly different average returns on their financial assets (a standard deviation of 14%) and on their net worth (a standard deviation of 8%). Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the financial wealth distribution increases the return by 3 percentage points - and by 17 percentage points when the same exercise is performed for the return to net worth. Fourth, wealth returns exhibit substantial persistence over time. We argue that while this persistence partly reflects stable differences in risk exposure and assets scale, it also reflects persistent heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are (mildly) correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate. Mode of access: Internet Guiso, Luigi. Malacrino, Davide. Pistaferri, Luigi. IMF Working Papers; Working Paper ; No. 2018/171 Full text available on IMF http://elibrary.imf.org/view/journals/001/2018/171/001.2018.issue-171-en.xml IMF e-Library