Publications [#378422] of Yingni Guo

Journal Articles

1. Barron, D; Guo, Y; Reich, B, Wealth Dynamics in Communities, Review of Economic Studies, vol. 90 no. 4 (July, 2023), pp. 1642-1668 [doi]
   (last updated on 2025/02/01)

   Abstract:
   This article develops a model to explore how favour exchange influences wealth dynamics. We identify a key obstacle to wealth accumulation: wealth crowds out favour exchange. Therefore, households must choose between growing their wealth and accessing favour exchange. We show that low-wealth households rely on favour exchange at the cost of having tightly limited long-term wealth. As a result, initial wealth disparities persist and can even grow worse. We then explore how communities and policymakers can overcome this obstacle. Using simulations, we show that community benefits and place-based policies can stimulate both saving and favour exchange, and in some cases, can even transform favour exchange into a force that accelerates wealth accumulation.