Is the Spanish economy positioned at its optimal progressivity level in personal income tax? This article quantifies the aggregate, distributional, and welfare consequences of moving toward such an optimal level. A heterogeneous households general equilibrium model featuring both life cycle and...

We simulate a two-period overlapping generations model with heterogeneous agents. Parents receive utility from the quantity and quality of their offspring. An increase in the wage rate leads to higher opportunity costs of child-rearing time, thus implying lower fertility and higher quality per...

Across U.S. households, the distribution of wealth is more skewed and fat-tailed than that of earnings. Benchmark models such as Aiyagari (1994), however, imply a less skewed and fat-tailed distribution for wealth than for earnings, because of their assumptions of (i) stationary earnings...