Existing models of equilibrium unemployment with endogenous labor market participation are complex, generate procyclical unemployment rates, and suffer from the usual defects of matching models. We embed endogenous participation in a simple, tractable job market matching model, show analytically...

We present an optimal (Ramsey) social security policy analysis in the presence of demographic uncertainties and incomplete markets. According to our findings, a social security system is an efficient instrument for intergenerational risk-sharing. When compared with government debt, a...

The paper analyzes a heterogeneous agents macro model in which large fortunes are created through entrepreneurial behavior. Special attention is given to the saving behavior of the very wealthy families. It is a prominent puzzle in consumption theory that the very rich save more than what one...

The paper provides a method to measure the accuracy of numerical solutions to stochastic dynamic optimization problems. The theorems proven in the paper provide, first, a tight upper bound on the loss in the value function that comes from using the numerical solution rather than the exact...

I will discuss my experiences with the course "Simulation methods", given several times in the graduate program of the University Pompeu Fabra, Barcelona. The main topics of the course are 1) Basic techniques of numerical analysis: nonlinear unconstrained and constrained optimization, nonlinear...

The paper deals with the efficient computation of general equilibrium models with a continuum of heterogenous agents. It compares an improved version of the Krusell-Smith algorithm to a backward-induction algorithm. The Krusell-Smith algorithm I use in the paper modifies the original algorithm...

The paper presents a method for the recursive solution of models with a continuum of heterogeneous agents. Following Krusell and Smith (1998) and others, it is assumed that the wealth distribution in the economy can be represented, to a sufficient degree of accuracy, by a finite number of...