This essay argues that the Great Recession exposed how badly representative-agent models capture household consumption behavior, and outlines the emerging Heterogeneous Agent New Keynesian (HANK) …
This paper builds a two-asset Heterogeneous Agent New Keynesian (HANK) model matching the empirical joint distribution of income, liquid, and illiquid wealth, and finds that the indirect effect of an …
This review systematically compares heterogeneous-agent incomplete-markets models to see which model features and calibration strategies can deliver both a realistically large average marginal …
This paper develops a continuous-time method for solving heterogeneous-agent models with aggregate shocks by linearizing around a nonlinearly computed stationary equilibrium (extending Reiter's …