Ravenna, Federico; Vincent, Nicolas - Centre Interuniversitaire sur le Risque, les Politiques … - 2014
We propose a DSGE model with income heterogeneity to help discriminate across competing explanations of the cross-sectional divergence in debt-to-income ratios in US data. We show that for a DSGE model to be consistent with the data, the divergence in income growth should not be anticipated and...