In this paper we construct a stochastic overlapping-generations general equilibrium model in which households are subject to aggregate shocks that affect both wages and asset prices. We use a calibrated version of the model to quantify how the welfare costs of severe recessions are distributed...

What is the role of credit scores in credit markets? We argue that it is a stand-in for a market assessment of a person’s unobservable type (which here we take to be patience). We pose a model of persistent hidden types where observable actions shape the public assessment of a person’s type...

Frontmatter -- CONTENTS -- ILLUSTRATIONS -- TABLES -- PREFACE -- CONTRIBUTORS -- 1. Economic Growth and Business Cycles -- 2. Recursive Methods for Computing Equilibria of Business Cycle Models -- 3. Computing Equilibria of Nonoptimal Economies -- 4. Models with Heterogeneous Agents -- 5....

We provide new evidence on the the cyclical behavior of household size in the United States from 1979 to 2010. During economic downturns, people live in larger households. This is mostly, but not entirely, driven by young people moving into or delaying departure from the parental home. We assess...

This paper essentially puts together procedures that are used in the computation of equilibria in models with a very large number of heterogeneous agents. It is not a complete description of all procedures used in the literature. It describes procedures that deal with infinitely lived agent...

We study, theoretically and quantitatively, the equilibrium of an unsecured consumer credit industry where credit-suppliers take deposits at a given interest rate and offer loans to households via a menu of credit levels and associated interest rates. The loan industry is competitive, with free...

José-Víctor Ríos-Rull is Professor of Economics at the University of Pennsylvania. His main interests lie in distributional issues in macroeconomics, public economics and demographic economics.

Do the implications for business cycle issues change when we switch from studying infinitely-lived, representative-agent models to more sophisticated demographic structures with finitely-lived agents? This article addresses that question by using a large, overlapping-generations model that is...