Vast literature is available covering main Informal Economy (IE) causes and consequences for Latin America and Caribbean (LAC), but its size estimation has been mainly limited to worldwide models applied to the region. This paper proposes a MIMIC Base Model using a data set composed by 41...

We consider a differential game of a conflict between two factions who both have a desire to exact revenge. We show that, in contrast to conventional wisdom, the desire for revenge need not lead to escalation of conflicts. Surprisingly, in the open-loop equilibrium, the weaker faction exerts a...

The definition of inequality is complicated and difficult to assess, and there are various means by which it is evaluated. This study uses the now well-accepted measures of body mass, height, and weight to assess inequality’s relationship with current and cumulative net nutrition. Taller...

In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that incorporates household consumption and family labour supply decisions. We derive analytical expressions based on approximations for the dynamics of consumption, hours, and earnings...

Existing evidence of inequality aversion relies on data from class-room experiments where subjects face hypothetical questions. This paper estimates the magnitude of inequality aversion using representative survey data, with questions related to the real-economy situations the respondents face....

In this paper, we revisit the association between happiness and inequality. We argue that the interaction between the perceived and the actual fairness of the income generation process affects this association. Building on a simple model of individual labor-market participation under...

In this paper, we demonstrate how age-adjusted inequality measures can be used to evaluate whether changes in inequality over time are due to changes in the age structure. To this end, we use administrative data on earnings for every male Norwegian during 1967-2000. We find that the substantial...

It is argued that the concept of well-being inequality cannot be properly defined without taking the referencing process into account. The reference effect depends on how frequently individuals compare with others and on the degree of social transparency in society. In this paper we employ the...

This paper studies how household inequality shapes the effects of the zero lower bound (ZLB) on nominal interest rates on aggregate dynamics. To do so, we consider a heterogeneous agent New Keynesian (HANK) model with an occasionally binding ZLB and solve for its fully nonlinear stochastic...

Rent seeking leads to a misallocation of resources that worsens economic outcomes and reduces aggregate welfare. We conduct a quantitative examination of the distributional effects of rent extraction via the financial sector. Rent seeking introduces a possibility for insurance against...