Showing 1 - 10 of 14
What is the relationship between wealth inequality and asset prices? We study this question in a dynamic two-agent economy with incomplete markets. Agents face correlated labor-income risk, but there is no aggregate risk. The only asset is a Lucas tree, which is traded subject to a...
Persistent link: https://www.econbiz.de/10011133621
How do families behave dynamically? We provide a framework for studying economic problems in which family behavior is essential. Our key innovation is the inclusion of imperfectly altruistic agents in an otherwise standard consumption–savings problem with exogenous income risk. This gives rise...
Persistent link: https://www.econbiz.de/10011160864
reciprocate them in the future.
Persistent link: https://www.econbiz.de/10011080521
Online appendix for the Review of Economic Dynamics article
Persistent link: https://www.econbiz.de/10011082247
This paper studies a dynamic Markovian game of two infinitely-lived altruistic agents without commitment. Players can save, consume and give transfers to each other. We identify a continuum of equilibria in which imperfectly-altruistic agents act as if they were a perfectly-altruistic dynasty...
Persistent link: https://www.econbiz.de/10010744711
Aging populations and increasing health-care costs will lead to an explosion in costs from long-term care (LTC) for permanently disabled elderly citizens. Governments are considering and implementing different kinds of policy responses, among them government-provided minimal care combined with...
Persistent link: https://www.econbiz.de/10010685659
What is the response of aggregate consumption to a deficit-financed tax cut? It is well-known that intergenerational transfers are key to answer this question. I address this issue by studying a heterogeneous-agents overlapping-generations economy with imperfect altruism. The model generates...
Persistent link: https://www.econbiz.de/10011081711
This paper revisits the question if the user cost of capital plays an important role for investment decisions using Bayesian estimation techniques. These methods offer advantages over classical econometric tools in this area: The most important are that prior distributions offer a convincing way...
Persistent link: https://www.econbiz.de/10005407891
horizon version of Chari & Hopenhayn’s (1991) vintage-human-capital model. Different skill levels inside a vintage are complementary in production. I establish equivalence between competitive equilibrium and a planner’s problem, which ensures uniqueness of equilibrium. Returns to skill and...
Persistent link: https://www.econbiz.de/10011080722
In this paper, we study the flows between self-employment, unemployment and paid employment, and how these vary over the business cycle. First, we document these flows in the data, paying particular attention to previous labor market outcomes for workers entering self-employment, and subsequent...
Persistent link: https://www.econbiz.de/10011085140