Firms that are more central invest more in equilibrium. Central firms are exposed to larger idiosyncratic shocks that propagate in the production network. Their incentive to engage in precautionary saving is larger, leading to larger investment. In the data, I find support for this prediction,...

We use a calibrated life-cycle model to evaluate why high income households save as a group a much higher fraction of income than do low income households in US cross-section data. We find that (1) age and relatively permanent earnings differences across households together with the structure of...

We provide evidence that the distributions of consumption, labor income, wealth, and capital income exhibit asymptotic power-law behavior with a strict ranking of upper tail inequality, in that order, from the least to the most unequal. We show analytically and quantitatively that the canonical...