We analyze a generalized neoclassical growth model that combines a normalized CES production function and possible asymmetries of savings out of factor incomes. This generalized model helps to shed new light on a recent debate concerning the impact of factor substitution and income distribution...

Starting from a review of the main strands of orthodox and heterodox distribution and growth models and their distinguishing features, with the post-Kaleckian Bhaduri/Marglin (1990) (and Kurz 1990) model as a specific, but highly flexible variant of heterodox distribution and growth theories, we...

We provide two ways to reconcile small values of the intertemporal elasticity of substitution (IES) that range between 0.35 and 0.5 with empirical evidence that the IES is large. We do this reconciliation using a model in which all agents have identical preferences and the same access to asset...

This paper aims at analyzing the implications of individuals' consumption jealousy on the dynamic structure of a two-sector model economy. We find that status-seeking substantially influences both, the long-term properties and the adjustment behavior of the model. Depending on the status motive,...

This paper shows that the consumption-based asset pricing model (C-CAPM) with low-probability disaster risk rationalizes large pricing errors, i.e., Euler equation errors. This result is remarkable, since Lettau and Ludvigson (2009) show that leading asset pricing models cannot explain sizeable...

We study structural change in a simple, two-sector endogenous growth model and show that the presence of commodity-specific consumption externalities can be a source of structural change. When the degrees of consumption externalities are different between different goods, the two sectors grow at...

We propose a simple and powerful numerical algorithm to compute the transition process in continuous-time dynamic equilibrium models with rare events. In this paper we transform the dynamic system of stochastic differential equations into a system of functional differential equations of the...

This paper quantifies the welfare cost of consumption externalities in an endogenous growth model with habit formation. Agent's utility depends on both current consumption and a reference consumption level determined by economy-wide average past consumption. Although utility may be lower in the...

In this paper, I present a theory of dynamic economic growth, business cycles, and asset pricing that integrates (1) Marx's idea (and emphasized by Klein) of a two-class heterogeneity of the ownership structure of physical capital and human capital in a capitalist society, (2) Keynes' idea of...

We propose a simple and powerful method for determining the transition processin continuous-time DSGE models under Poisson uncertainty numerically. The idea isto transform the system of stochastic dierential equations into a system of functionaldierential equations of the retarded type. We then...