I study the asset pricing implications and the efficiency of a tractable dynamic stochastic general equilibrium model with heterogeneous agents and incomplete markets along the lines of Krebs [Krebs, T., 2003. Human Capital Risk and Economic Growth. Quarterly Journal of Economics 118(2),...

The size distributions of many economic variables seem to obey the double power law, that is, the power law holds in both the upper and the lower tails. I explain this emergence of the double power law—which has important economic, econometric, and social implications—using a tractable...

In numerically implementing the optimization of an expected value in many economic models, it is often necessary to approximate a given continuous probability distribution by a discrete distribution. We propose an approximation method based on the principle of maximum entropy and minimum...