Managing Inequality over Business Cycles : Optimal Policies with Heterogeneous Agents and Aggregate Shocks
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1 février 2022
- handle: 10670/1.dhs771
- hal: hal-03601016
Sujets proches
Commonwealth, The Administration Political thought Government Political theory Civil government Commonwealth, The Science, Political Administration Politics Administration Unemployment benefits Insurance, Unemployment Unemployment compensation Funds Funding Social inequality Social equality Inequality Egalitarianism Borrowing Economic fluctuations Economic cycles Trade Agency (Philosophy) Agents Person (Philosophy) Administration Public administration--Law and legislation Law, Administrative Estates, Administration of Administration Finance, commerce, confiscations, etcCiter ce document
François Le Grand et al., « Managing Inequality over Business Cycles : Optimal Policies with Heterogeneous Agents and Aggregate Shocks », HAL-SHS : économie et finance, ID : 10670/1.dhs771
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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.