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Interpreting Life Cycle Inequality Patterns as an Efficient Allocation: Mission Impossible?

The life-cycle patterns of consumption, wage and hours inequality observed in U.S. cross-section data are commonly viewed as incompatible with a Pareto efficient allocation. We determine the extent to which these qualitative and quantitative patterns can or cannot be produced by Pareto efficient allocations in models with preference shocks, wage shocks and full information. (Copyright: Elsevier)
Year of publication:
2014
Authors: Badel, Alejandro ; Huggett, Mark
Published in:
Review of Economic Dynamics. - Society for Economic Dynamics - SED. - Vol. 17.2014, 4, p. 613-629
Publisher: Society for Economic Dynamics - SED
Subject: Life cycle | Inequality | Efficient Allocation | Preference shocks
Type of publication: Article
Notes:
Published
Other identifiers:
10.1016/j.red.2014.02.002 [DOI]
Classification: E21 - Consumption; Saving ; D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving ; D52 - Incomplete Markets
Source:
Persistent link: https://www.econbiz.de/10010945607
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