We discuss long-run growth in an economy which is subject to aggregate productivity shocks affecting all factors of production. We demonstrate that the presence of labor income risk unambiguously is an important determinant of long-run expected growth. The issue of dynamic inefficiency of the...

This paper discusses the emergence of endogenous redistributive cycles in a stochastic growth model with incomplete asset markets and heterogeneous agents who vote on the degree of progressivity in the tax-transfer scheme. The model draws from Bénabou (in B. S. Bernanke and J. J. Rotemberg...

This paper examines the learning dynamics of boundedly rational agents, who are asked to contribute to a discrete public good. In an incomplete information setting, we discuss contribution games and subscription games. The theoretical results on myopic best response dynamics implying striking...

The paper analyzes the effects of individual--specific and economy--wide productivity shocks on intertemporal decision--making of risk averse agents. We focus especially on the consequences for long--run growth. By contrasting the most widely used models of modern growth theory, namely the...

This paper discusses the emergence of endogenous redistributive cycles in a stochastic growth model with incomplete asset markets and heterogeneous agents, where agents vote on the degree of progressivity in the tax-transfer-scheme. We develop two models, the first being highly-stylized, where...