Managing Inequality over Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks
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- handle: 10670/1.5iku3o
- hal: hal-03501381
- doi: 10.1111/iere.12537
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info:eu-repo/semantics/altIdentifier/doi/10.1111/iere.12537
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Mots-clés
Incomplete Markets Optimal Policies Heterogeneous Agent Models D - Microeconomics/D.D3 - Distribution/D.D3.D31 - Personal Income, Wealth, and Their Distributions D - Microeconomics/D.D9 - Intertemporal Choice/D.D9.D91 - Intertemporal Household Choice • Life Cycle Models and Saving E - Macroeconomics and Monetary Economics/E.E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy/E.E2.E21 - Consumption • Saving • Wealth E - Macroeconomics and Monetary Economics/E.E4 - Money and Interest Rates/E.E4.E44 - Financial Markets and the MacroeconomySujets proches
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François Le Grand et al., « Managing Inequality over Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks », HAL-SHS : économie et finance, ID : 10.1111/iere.12537
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Résumé
We present a truncation theory of idiosyncratic histories for heterogeneous-agent models. This method allows us to solve for optimal Ramsey policies in such models with aggregate shocks. The method can be applied to a large variety of settings, with occasionally binding credit constraints. We use this theory to characterize the optimal level of unemployment insurance over the business cycle in a production economy. We find that the optimal policy is countercyclical.