We study the evolution of the distribution of assets in a discrete time, deterministic growth model with log-utility, a minimum consumption requirement, Cobb-Douglas technology, and agents differing in initial assets. We prove that the coefficient of variation in assets across agents decreases...

We study the evolution of the distribution of assets in a discrete time, de-terministic growth model with log-utility, a minimum consumption require-ment, Cobb-Douglas technology, and agents differing in initial assets. We prove that the coefficient of variation in assets across agents decreases...

This paper develops a real business cycle model characterized by idiosyncratic employment shocks and quantitatively explores the behavior of aggregate variables under the assumptions of complete and incomplete insurance markets. The results show that the model with incomplete markets produces...

We explore the accumulation of assets in the presence of limited insurance against idiosyncratic shocks, borrowing constraints and endogenous labor productivity due to the so-called "nutrition curve". We show that in such an environment, any stationary equilibrium is characterized by a polarized...

is, there are only extremely rich and extremely poor agents.

We study the effect of a borrowing limit on aggregate welfare in the context of an incomplete markets economy a la Aiyagari anf Huggett. We show that a larger borrowing limit is not necessarily welfare-improving.

Endogenous labor supply decisions are introduced in an equilibrium model of limited insurance against idiosyncratic shocks. Unlike in the standard case with exogenous labor (e.g. [Aiyagari, S.R., 1994. Uninsured idiosyncratic risk and aggregate saving. Quarterly Journal of Economics 109, 659–684;...

We explore the accumulation of capital in the presence of limited insurance against idiosyncratic shocks, borrowing constraints and endogenous labor supply. In the exogenous labor supply case (e.g. Aiyagari 1994, Huggett 1997), the presence of limited insurance increases the demand for savings...