Before revision:  We present two applications: we show that (i) the tails of the wealth distribution in a heterogeneous-agent dynamic general equilibrium model with idiosyncratic investment risk are Paretian, and (ii) a random growth model for the population dynamics of Japanese municipalities is consistent with the observed Pareto exponent but only after allowing for Markovian dynamics .
After revision:  We present two applications: we show that (i) the tails of the wealth distribution in a heterogeneous-agent dynamic general equilibrium model , in which agents engage in private enterprise and trade risk-free bonds while subject to Markov-switching productivity and mortality risk. A plausible numerical calibration yields a Pareto exponent of 1.39 for the upper tail of the wealth distribution, similar to estimates obtained from cross-sectional data .