To explain the Pareto tail behavior empirically observed in wealth distributions, the quantitative macro literature has occasionally assumed that agents have random discount factors. This paper formally proves that the stationary wealth distribution in a simple Huggett model with random...

The cross-sectional distribution of consumption is commonly approximated by the lognormal distribution. This note shows that consumption is better described by the double Pareto-lognormal distribution (dPlN), which has a lognormal body with two Pareto tails and arises as the stationary...

We study a small open economy displaying Pareto-distributed wealth resulting from random death. The government runs a distribution scheme on inheritance. We present the mathematical background that allows to study the dynamics of means. We end up with ordinary differential equations for the mean...

The size distributions of many economic variables seem to obey the double power law, that is, the power law holds in both the upper and the lower tails. I explain the emergence of the double power law - which has important economic, econometric, and social implications - using a tractable...

The issue of income inequality occupies a prominent position in the research agenda of academic and policy circles alike, especially after the crisis of 2008, due to its potential causal link with the development of credit bubbles and therefore the emergence of financial crises. This paper...

This paper introduces heterogeneous microeconomic behavior into a demand-driven stock-flow consistent model with endogenous credit creation, so as to study the joint dynamics of both the personal and the functional distribution of income, household debt and aggregate demand. The distinctive...

We build an agent-based model to study how coordination failures, credit constraints and unequal access to investment opportunities affect inequality and aggregate income dynamics. The economy is populated by households who can invest in alternative projects associated with different...