Computation of equilibria in heterogeneous agent models

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 versions of the growth model with and without aggregate uncertainty, overlapping generations models, and dynamic political economy models.Econometric models

The Balance of Payments and Borrowing Constraints: An Alternative View of the Mexican Crisis

In standard models of the balance of payments, crises occur when investors begin to doubt the credibility of the government's commitment to its exchange rate policy. In this paper, we develop an alternative model in which balance of payments crises occur even if the credibility of government fiscal, monetary, and exchange rate policies is never in doubt. In this alternative model, international lending is constrained by the risk of repudiation. Balance of payments crises occur when the government and citizens of a country hit their international borrowing constraints. Our model is broadly consistent with events in Mexico from 1987-1995. More generally, our model suggests that countries which undertake sweeping macroeconomic and structural reforms should expect to face a balance of payments crisis when they exhaust their access to international capital inflows.

Accounting for the U.S. Earnings and Wealth Inequality

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Understanding the U.S. distribution of wealth

This article describes the current state of economic theory intended to explain the unequal distribution of wealth among U.S. households. The models reviewed are heterogeneous agent versions of standard neoclassical growth models with uninsurable idiosyncratic shocks to earnings. The models endogenously generate differences in asset holdings as a result of the household's desire to smooth consumption while earnings fluctuate. Both of the dominant types of models--dynastic and life cycle models--reproduce the U.S. wealth distribution poorly. The article describes several features recently proposed as additions to the theory based on changes in earnings, including business ownership, higher rates of return on high asset levels, random capital gains, government programs to guarantee a minimum level of consumption, and changes in health and marital status. None of these features has been fully analyzed yet, but they all seem to have potential to move the models in the right direction.Wealth

Habit formation: implications for the wealth distribution

In this paper we study the role of habit formation in shaping the wealth distribution in an otherwise standard heterogeneous agents model economy with idiosyncratic uncertainty. We compare the inplications for precautionary savings and for wealth concentration between economies that only differ in the role played by habit formation. Once preferences are properly adjusted so that the Intertemporal Elasticity of Substituion is the same in all model economies studied, we find that habit formation brings a hefty increase in precautionary savings and very mild reductions in the coefficient of variation and in the Gini index of wealth. We also find that the reductions in these measures of inequality also hold when we adjust our economy so that aggregate savings are the same as in the economy without habit formation. These findings hold for both persistent and non persistent habits although for the former the quantitative size of the effects is much larger. We conclude that habit formation, while being a mechanism that increases the amount of precautionary savings generated in a model, does not change the implications for wealth inequality that arise from standard models

La perífrasi verbal conativa (ser + a + infinitiu) : descripció i gènesi

In Catalan the verbal periphrasis [ser `to be' + a `to' + infinitive] expresses the conative sense (also called futured past). Catalan grammars do not report this construction, probably because it is unusual. In fact, this verbal periphrasis is defective: in common language, the auxiliary is only used in certain tenses (e. g. imperfect past of subjunctive), but in some regions it is used in other tenses. In this paper we report on this construction and we try to explain its origin

Potential natural vegetation and pre-anthropic pollen records on the Azores Islands in a Macaronesian context

This paper discusses the concept of potential natural vegetation (PNV) in the light of the pollen records available to date for the Macaronesian biogeographical region, with emphasis on the Azores Islands. The classical debate on the convenience or not of the PNV concept has been recently revived in the Canary Islands, where pollen records of pre-anthropic vegetation seemed to strongly disagree with the existing PNV reconstructions. Contrastingly, more recent PNV model outputs from the Azores Islands show outstanding parallelisms with pre-anthropic pollen records, at least in qualitative terms. We suggest the development of more detailed quantitative studies to compare these methodologies as an opportunity for improving the performance of both. PNV modelling may benefit by incorporating empirical data on past vegetation useful for calibration and validation purposes, whereas palynology may improve past reconstructions by minimizing interpretative biases linked to differential pollen production, dispersal and preservation.Spanish Ministry of Economy and Competititvity, project PaleoNAO [CGL2010-15767]Spanish Ministry of Economy and Competititvity, project RapidNAO [CGL2013-40608-R]Spanish Ministry of Economy and Competititvity, project PaleoMODES [CGL2016-75281-C2-1-R]info:eu-repo/semantics/publishedVersio

Earnings and Wealth Inequality and Income Taxation: Quantifying the Trade-Offs of Switching to a Proportional Income Tax in the U.S. Ohio

This papaer quantifies the steady-state aggregate, distributinal and mobility effects of switching the U.S. to a proportional income tax system. As a perriquisite to the analysi, we propose a theory of earnings and wealth inequality capable of accounting quantitatively for the key aggregate and inequality facts of the U. S. economy. This theory is based on saving to smooth uninsured household-specific risk, for dynastic households that also have some life-cycle characteristics. A suitable calibration of our model economy replicates the U.S. growth facts, earnings and wealth distributions, the progressivity of the tax system and the size of the U.S. government. We also solve a similar model economy in which the government livies a proportional income tax to finance the same flow of government expenditures and public transfers. Our finding show that in this class of model worlds a switch from the U.S. tax system to a proporcional tax system implies the following trade-offs, i.) it increases efficiency as measured by aggregate output by 4,4%, ii. ) it increases inequality as measured by the Gini index of the wealth distribution by 10.4%, and iv.) it changes by little the mobility between the different earnings and wealth groups

On the equilibrium concept for overlapping generations organizations

A necessary feature for equilibrium is that beliefs about the behavior of other agents are rational. We argue that in stationary OLG environments this implies that any future generation in the same situation as the initial generation must do as well as the initial generation did in that situation. We conclude that the existing equilibrium concepts in the literature do not satisfy this condition. We then propose an alternative equilibrium concept, organizational equilibrium, that satisfies this condition. We show that equilibrium exists, it is unique, and it improves over autarky without achieving optimality. Moreover, the equilibrium can be readily found by solving a maximization program.Economics ; Equilibrium (Economics) - Mathematical models

The ‘Anthropocene’: A requiem for the Geologic Time Scale?

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