D52

Sebastian Di Tella · Benjamin Hébert · Pablo Kurlat

Building on the Kaplan-Violante two-account incomplete-markets model, this manuscript shows that once idiosyncratic risk is assumed to rise when asset valuations fall, the aggregate value of each …

Adrien Auclert · Rodolfo Rigato · Matthew Rognlie · Ludwig Straub

This paper extends the "certainty equivalence" shortcut that makes first-order sequence-space methods fast for heterogeneous-agent models to second and third order, showing that these higher-order …

Iván Werning

This paper derives a generalized Euler relation for aggregate consumption in incomplete-markets economies with idiosyncratic income risk, and shows that under specific benchmark conditions -- zero …

Andreas Schaab

Using a new global solution method for a HANK model with counter-cyclical unemployment risk and a zero lower bound, this job-market paper shows that the dominant transmission channel of macroeconomic …

Adrien Auclert

This paper shows that monetary policy affects aggregate consumption not only through the standard income and substitution channels but also through three redistribution channels -- earnings …

Adrien Auclert · Bence Bardóczy · Matthew Rognlie

This paper shows that New Keynesian models with frictionless labor supply cannot simultaneously match three well-established empirical facts -- high marginal propensities to consume, low marginal …

S. Rao Aiyagari

Against Chamley's (1986) and Lucas's (1990) result that the optimal long-run capital income tax is zero, this paper shows that in a Bewley-type incomplete-markets economy with uninsured idiosyncratic …

Adrien Auclert · Michael Cai · Matthew Rognlie · Ludwig Straub

Using a new sequence-space method for characterizing the long-run ("Ramsey") steady state of dynamic optimal-taxation problems, this paper finds that for standard calibrations of Aiyagari (1995)-style …

François Le Grand · Alaïs Martin-Baillon · Xavier Ragot

Should monetary policy deviate from price stability to address redistributive concerns in an economy with heterogeneous agents? The paper jointly solves for optimal monetary and fiscal policy under …

Yucheng Yang · Chiyuan Wang · Andreas Schaab · Benjamin Moll

By replacing the cross-sectional distribution with low-dimensional current prices as the state variable and letting agents learn equilibrium price dynamics from simulated paths -- while still …

Enrique G. Mendoza

A standard small-open-economy business-cycle model, augmented with a collateral constraint that caps total debt -- including within-period working-capital loans -- at a fraction of the market value of …

Marcus Hagedorn · Iourii Manovskii · Kurt Mitman

This paper builds a Heterogeneous Agent New Keynesian (HANK) model with incomplete markets, capital, and nominal price/wage rigidities -- with a government budget constraint specified in nominal terms …

Greg Kaplan · Giovanni L. Violante

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 …

S. Rao Aiyagari

This paper builds the standard growth model modified so that a continuum of infinitely-lived agents face uninsured idiosyncratic labor-income risk and a borrowing constraint, and shows that the …

Adrien Auclert · Matthew Rognlie · Ludwig Straub · Tomáš Ťapák

Most heterogeneous-agent New Keynesian (HANK) models take household portfolios as exogenously fixed. This paper develops a sequence-space method for solving instead for endogenous, risk-hedging …