The focus of this paper is the link between income volatility and the accumulation of human capital in the presence of credit constraints. Also, the effect of income inequality on the accumulation of human capital within the same framework is studied.

We study the sustainability of public debt in a closed production economy where a benevolent government chooses fiscal policies, including haircuts on its outstanding debt, in a discretionary manner. Government bonds are held by domestic agents to smooth consumption over time and because they...

The focus of this paper is the link between income volatility and the accumulation of human capital in the presence of credit constraints. Also, the effect of income inequality on the accumulation of human capital within the same framework is studied