The application in Economics of methods and tools originally thought for other disciplines is not new. In this paper we show how the compartmental approach, typical of Biology, Medicine, Chemistry, etc., can be used as a tool to represent the heterogeneity of the agents and introduce it into the...

I undertake a quantitative investigation into the short run effects of changes in the timing of taxes for a model economy in which heterogeneous households trade only one asset and face a borrowing constraint. This asset market structure implies that the consumption of low wealth households is...

We argue that the fiscal multiplier of government purchases is increasing in the spending shock, in contrast to what is assumed in most of the literature. The fiscal multiplier is largest for large positive government spending shocks and smallest for large contractions in government spending. We...

The aim of this paper is to study the relationship between the intertemporal behavior of taxes and wealth distribution. The optimal-taxation literature has often concentrated on representative-agent models, in which it is optimal to smooth distortionary taxes. When tax liabilities are unevenly...