This paper uses a representative agent model to infer the welfare of heterogeneous agents. It does so by partitioning the household into subunits and allocating consumption to each subunit proportionally to the income the subunit generates through wages and capital returns. We show that for a...

There is considerable evidence that real wages have become more procyclical over time in the U.S. A novel explanation for this phenomenon has been recently offered by Huang, Liu, and Phaneuf (2004), HLP. They develop a model to show that, as the input-output structure of an economy becomes more...