We study how the introduction of consumption externalities affects the efficiency of the dynamic equilibrium in an economy displaying dynastic altruism. When the bequest motive is inoperative consumption externalities affect the intertemporal margin between young and old consumption and thus...

We analyze how the presence of endogenous preferences affects the altruistic bequest motive from parents to children. We will show that the existence of habits raises the threshold value of the intergenerational discount factor above which altruistic bequests are positive, while aspiration...

We analyze how the presence of endogenous preferences affects the altruistic bequest motive from parents to children. We will show that the existence of habits raises the threshold value of the intergenerational discount factor above which altruistic bequests are positive, while aspiration...

This paper explores the role of consumption externalities in a neoclassical growth model in which households have heterogeneous preferences. We fi?nd that the degree of conformism in consumption held by each household signifi?cantly affects the speed of convergence of the aggregate economy as...

In this paper, we characterize the relationship between the initial distribution of human capital and physical inheritances among individuals and the long-run distribution of these two variables. In a model with indivisible investment in education, we analyze how the initial distribution of...

This study proposes a general equilibrium life-cycle model where households make labor supply decisions and smooth consumption using one asset. This asset involves a stochastic adjustment cost. A recession arises when the tax revenue generated from a tax hike is spent as government expenditures....

In this paper, we characterize the relationship between the initial distribution of human capital and physical inheritances among individuals and the long-run distribution of these two variables. In a model with indivisible investment in education, we analyze how the initial distribution of...

In this paper, we characterize the relationship between the initial distribution of human capital and physical inheritances among individuals and the long-run distri- bution of these two variables. In a model with indivisible investment in education, we analyze how the initial distribution of...

Robert Solow has criticized our 2006 Journal of Economic Perspectives essay describing "Modern Macroeconomics in Practice." Solow eloquently voices the commonly heard complaint that too much macroeconomic work today starts with a model with a single type of agent. We argue that modern...