> They are illustrations of a general principle: the legal inheritance channel compounds while the biological one reverts.
All this pseudo-math relies on the fact that family wealth strictly compounds and does not decrease or revert to the mean. But that is not true. Economists study this, and the exact numbers differ but family wealth _does_ revert back to the mean in just a few generations. Wealth does not stay in the same family compounding forever.
All this pseudo-math relies on the fact that family wealth strictly compounds and does not decrease or revert to the mean. But that is not true. Economists study this, and the exact numbers differ but family wealth _does_ revert back to the mean in just a few generations. Wealth does not stay in the same family compounding forever.
https://www.jstor.org/stable/10.1086/378526
https://bnh.bank/wp-content/uploads/2023/05/Heres-to-Your-We...