Maliar, Lilia; Maliar, Serguei - Instituto Valenciano de Investigaciones Económicas (IVIE) - 2002
This paper studies a complete-market version of the neoclassical growth model, where agents face idiosyncratic shocks to earnings. We show that if agents possess identical preferences of either the CRRA or the addilog type, then the heterogeneous-agent economy behaves as if there was a...