Showing 1 - 10 of 8,292
Rich behavioral biases, mistakes and limits on rational decision-making are often thought to make equilibrium analysis much more intractable. We show that this is not the case in the context of the neoclassical growth model (potentially incorporating incomplete markets and distortions). We break...
Persistent link: https://www.econbiz.de/10012481011
Solution or the Lindahl Equilibrium to proceed to the Pareto frontier. We apply our theory to climate change mitigation, a …
Persistent link: https://www.econbiz.de/10012456435
We quantify a class of commonly-employed general equilibrium models of international trade and pricing-to-market that feature firm-level heterogeneity and consumers with nonhomothetic preferences. We demonstrate theoretically that the models lack the flexibility to match salient features of US...
Persistent link: https://www.econbiz.de/10012457260
This paper extends the methodology developed in Chien, Cole and Lustig (2011 & 2012) (hereafter CCL2011 and CCL2012, respectively) to analyze and compute the equilibria of economies with heterogeneous agents who have different asset trading technologies and are subject to both aggregate and...
Persistent link: https://www.econbiz.de/10012458339
This paper reports results from a laboratory experiment that investigates the Meltzer-Richard model of equilibrium tax rates, inequality, and income redistribution. We also extend that model to incorporate social preferences in the form of altruism and inequality aversion. The experiment varies...
Persistent link: https://www.econbiz.de/10012458719
The apparently unrelenting growth in the GDP-share of health spending (SHS) has been a perennial issue of policy concern. Does an equilibrium limit exist? The issue has been left open in recent dynamic models which take income growth and population aging as given. We view these variables as...
Persistent link: https://www.econbiz.de/10012458808
We develop a dynamic nonlinear, noisy REE model of credit risk pricing under dispersed information that can theoretically and quantitatively account for the credit spread puzzle. The first contribution is a sharp analytical characterization of the dynamic REE equilibrium and its comparative...
Persistent link: https://www.econbiz.de/10012458876
research exists. This paper proposes a theory of domestic sovereign default based on distributional incentives affecting the …
Persistent link: https://www.econbiz.de/10012459185
We survey the recent empirical and theoretical developments in the literature on the relation between prices and exchange rates. After updating some of the major findings in the empirical literature we present a simple framework to interpret this evidence. We review theoretical models that...
Persistent link: https://www.econbiz.de/10012459833
This paper proposes forward convergence as a model refinement scheme for linear rational expectations (LRE) models and an associated no-bubble condition as a solution selection criterion. We relate these two concepts to determinacy and characterize the complete set of economically relevant...
Persistent link: https://www.econbiz.de/10012460312