Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of … transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX …-cycle changes, transitory and permanent shocks and estimate the contribution of each to total inequality. Our model fits the joint …

regional interpersonal income and educational inequality, also influence wages and education in different ways across welfare …This paper examines whether differences in welfare regimes shape the incentives to work and get educated. Using … microeconomic data for more than 100,000 European individuals, the results show that welfare regimes make a difference for wages and …

aggregates and welfare. We argue that even though the laissez-faire equilibrium may be inefficient, there are usually better …

capital only if wealth inequality prevents an efficient allocation of capital by consumers, but financing via intermediaries …

welfare of domestic households. …

This paper analyses the welfare effects of changes in cross-sectional wage dispersion, using a class of tractable … heterogeneous-agent economies. We emphasize a trade-off in the welfare calculation that arises when labour supply is endogenous. On …, greater wage inequality presents opportunities to increase aggregate productivity by concentrating market work among more …

to borrowers. In this study, we consider redistribution as a channel for aggregate and welfare effects of inflation. We … weighted welfare of domestic households. …