We explore the link between wealth inequality and business cycle fluctuations in a two-sector neoclassical growth model with endogenous labor and heterogeneous agents. Assuming that wealth inequality is described by the distribution of shares of capital, we show that in the most plausible...

We consider a world in which individuals have private endowments and trade in markets, while their utility is sensitive to the consumption of their neighbors. Our interest is in understanding how social structure of comparisons, taken together with the familiar fundamentals of the economy �...

In the present paper the study of the welfare effects of endowment transfers is extended to the set of steady states of a general stationary overlapping generation model. A complete characterization of manipulations by coalitions and transfers which leads to welfare paradoxes is provided.

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In overlapping-generations economies with perfect financial markets and lumpsum taxation, restrictions on the government budget deficits do not limit the set of achievable allocations. For economies in which tax instruments are distortionary and limited in number, deficits are irrelevant only in...

The present paper builds a simple model of patent citations not based on the rich-get-richer aspect of preferential attachment. In our model the dynamics of citations are driven by known heterogeneities in the applicability of existing patents and aging. The model matches closely the hazard...

We study a model of multi-player communication. Privately informed decision makers have different preferences about the actions they take, and communicate to influence each othersʼ actions in their favor. We prove that the equilibrium capability of any player to send a truthful message to a set...

We introduce relative concerns in the form of conspicuous consumption in a standard economic geography model a la Krugman. The primary intuition is that conspicuous consumption imposes a negative externality on some agents and generates a centrifugal force. We show that this is not always the...

In the present paper we uncover a novel mechanism through which a minority can gain a disproportionate power in a perfectly functioning democracy. In our model, a government elected by majority within a two party democracy, decides on a unique redistributive instrument, the tax rate. We show...