This paper analyzes the standard Neoclassical growth model where agents are heterogeneous in their initial wealth. Wealth can be taxed in order to finance equal lump-sum transfers. We consider a representative democracy where elected officials select the current capital tax by playing a...

This paper studies the application of the simulated method of moments (SMM) for the estimation of nonlinear dynamic stochastic general equilibrium (DSGE) models. Monte Carlo analysis is employed to examine the small-sample properties of SMM in specifications with different curvature. Results...