Bachmann, Ruediger; Bai, Jinhui - In: Review of Economic Dynamics 16 (2013) 4, pp. 565-580
This paper explores the implications of economic and political inequality for the comovement of government purchases with macroeconomic fluctuations. We set up and compute a heterogeneous-agent neoclassical growth model, where households value government purchases which are financed by income...