We quantify the inefficiency of the retirement component of the US social security system within a model where agents receive idiosyncratic labor-productivity shocks that are privately observed

This paper investigates why high income households save on average a higher fraction of income than do low income households in US cross-section data. The three explanations considered are (1) age differences across households, (2) temporary earnings shocks and (3) the structure of social...

This paper analyzes the dispersion in consumption and earnings over the life-cycle. We first reexamine these facts by considering US data for the period (1980-2000) using alternative price deflators. We find that consumption and earnings dispersion increase with age, but that the increase in...

A common problem in dynamic economic theory is to determine when an increase in a parameter and/or an initial condition increases the future dynamics of a theoretical economy. This paper provides conditions that are necessary and sufficient for making statements of this type. The result is...

Is the use of fiat money essential in any efficient organization of exchange? We investigate this question in economies that are generalizations of the Townsend (1980) turnpike model that include limited commitment and differential information. We show that in the Townsend turnpike model fiat...