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Persistent link: https://www.econbiz.de/10012093810
Existing literature continues to be unable to offer a convincing explanation for the volatility of the stochastic discount factor in real world data. Our work provides such an explanation. We do not rely on frictions, market incompleteness or transactions costs of any kind. Instead, we modify a...
Persistent link: https://www.econbiz.de/10011084682
Existing literature continues to be unable to offer a convincing explanation for the volatility of the stochastic discount factor in real world data. Our work provides such an explanation. We do not rely on frictions, market in completeness or transactions costs of any kind. Instead, we modify a...
Persistent link: https://www.econbiz.de/10010950948
We re-examine the destabilizing role of balanced-budget fiscal policy rules based on consumption taxation. Using a one-sector model with infinitely-lived households, we consider a specification of preferences derived from Jaimovich (2008) [14] and Jaimovich and Rebelo (2009) [15] which is...
Persistent link: https://www.econbiz.de/10011042995
We introduce a solution technique for the study of discrete time stochastic models populated by long-lived agents. We introduce aggregate uncertainty and complete markets into a 'perpetual-youth' model of a kind first studied by Olivier Blanchard and we show that the pure-trade version of the...
Persistent link: https://www.econbiz.de/10004992017
We consider a one-sector growth model which combines overlapping generations of finite lived agents and infinite lived consumers. We show that two types of equilibrium may exist. A first type corresponds to the modified golden rule if the stationary consumption of infinite lived agents is...
Persistent link: https://www.econbiz.de/10005066036
Persistent link: https://www.econbiz.de/10005117701
We consider a two-sector overlapping generations model with homothetic preferences. Under standard conditions on technologies, upon large enough values for the share of first period consumption over the wage income, we prove that the dynamic efficiency and local uniqueness of the competitive...
Persistent link: https://www.econbiz.de/10008551444
In this paper we consider a Ramsey one-sector model with non-separable homothetic preferences, endogenous labour and productive external effects arising from average capital and labour. We show that indeterminacy cannot arise when there are only capital externalities but that it does when there...
Persistent link: https://www.econbiz.de/10005124153
In this paper, we consider an aggregate overlapping generations model with endogenous labour, consumption in both periods of life, homothetic preferences and productive external effects coming from the average capital and labour. We show that under realistic calibrations of the parameters, in...
Persistent link: https://www.econbiz.de/10005136695