| > I guess that does not apply at all to developing countries like China. Have you looked at the second link? > No, an elasticity of zero would rather mean that people are overly taxed and therefore there is no transfer of wealth between generations, which is probably not what you want (what is already taxed belongs to you and whoever you decide to give it to). Low elasticity means high social mobility. It's the desciption of the same thing, only from the other direction. https://en.wikipedia.org/wiki/Social_mobility If your design goal is high social mobility (e.g. because you want a meritocratic society or simply argued from an ethical position) and high economic growth, you want to limit inheritance as much as possible. This is pretty much what Piketty et. al. have shown a few years ago. > Of course, elasticity of zero would mean that there is no whatsoever transfer of skills or intelligence between generations, which is genetically patently false. And yet elasticity is close to zero (0.15) in Denmark while being over three times higher in the US. The reason is obvious: Genetics predict potential, societal context predicts outcome. |