We develop a general equilibrium model of earnings, income and wealth heterogeneity in continuous time. We extend existing analytical and numerical methods to solve the model. We calibrate the model to U.S. data and find that stochastic interest rates provide a mechanism to link earnings, income...

Over the recent decades, wide-spread automation has led to a shift of the US labor force from occupations intensive in routine tasks into occupations intensive in manual and abstract tasks. I integrate routine-biased technological change into an incomplete markets model with occupation-specific...

What is the role of heterogenous house-price expectations for boom-bust cycles in the housing market? We exploit a unique Dutch panel data set on households' house price expectations and their consumption, savings and housing choices for the period 2003-2016. This period was characterized by a...

The inheritance tax is often seen as an effective tool to reduce wealth inequality, to raise public budgets if needed, and to increase incentives to work by lowering the tax burden on labour, which is especially high in Germany according to the OECD. The purpose of this paper is therefore to...

The article is concerned with understanding the impact of social preferences and wealth inequality on aggregate economic outcomes. We investigate how different manifestations of other-regarding preferences affect incentive contracts at the microeconomic level and how these in turn translate into...

Top distributions of income and wealth are still incompletely measured in many national statistics, particularly when using survey data. This paper develops the technique of incorporating the joint distributional relationship to enhance the estimation of these two top distributions. We leverage...

Economic growth varies substantially across regions and over time. This paper shows that economic growth in a person's birth place is an important determinant for wealth in adulthood. We exploit a new dataset that oversamples wealthy individuals in Germany and includes information on birth...

This paper analyzes the persistence of the shock caused by the American Civil War on the relative city size distribution of the United States. Our fi ndings suggest that the effects of this shock were permanent, which sharply contrasts with previous results regarding World War II for Japanese...