This Paper explores the implications of the recent sharp rise in US wage inequality for welfare and the cross-sectional distributions of hours worked, consumption and earnings. From 1967 to 1996 cross-sectional dispersion of earnings increased more than wage dispersion, due to a rise in the...

The existing superstar model (Rosen, 1981) does not require imperfect substitutes, and the convexity of total earnings with respect to talent is due to greater output for those with more talent. Our model explains why wages would increase at an increasing rate in talent. Imperfect...

This paper investigates empirically why Japan's household savings rate fell in the 1990s. We constructed an economic model consisting of two types of household: unconstrained life-cycle households and liquidity-constrained households. Unconstrained households generally save, but...

Investors who accept a greater degree of financial risk expect to benefit from higher returns and greater wealth over time. This study explores the relationship between net worth and net financial assets and risk tolerance using data from the 1998 Survey of Consumer Finances. Willingness to take...

The Charitable Profit Arrangement (the CPA program) has created an innovative new Social Fundraising tool serving the Donor and nonprofit worlds. It serves as an intermediary that facilitates fundraising for charities by allowing Donor's to Share the profits from their financial accounts with...

We develop a dynamic stochastic equilibrium model of two locations within a city where heterogeneous households make joint location and tenure mode decisions. To investigate the effect of homeownership on equilibrium prices and allocations, we compare the response of this model economy to a...

Modern macroeconomics empirically addresses economy-wide incentives behind economic actions by using insights from the way a single representative household would behave. This analytical approach requires that incentives of the poor and the rich are strictly aligned. In empirical analysis a...

Most simulated micro-founded macro models use solely consumer-demand aggregates in order to estimate deep economy-wide preference parameters, which are useful for policy evaluation. The underlying demand-aggregation properties that this approach requires, should be easy to empirically disprove:...

Studies of inequality often ignore resource allocation within the household. In doing so they miss an important element of the distribution of welfare that can vary dramatically depending on overall environmental and economic factors. Thus, measures of inequality that ignore intra household...

In this paper we develop an approach to measuring inequality and poverty that recognizes the fact that individuals within households may have both different preferences and differential access to resources. We argue that a measure based on estimates of the sharing rule is inadequate as an...