Animal Spirits in Woodford and Reichlin Economies: The Representative Agent Does Matter

Stefano Bosi () and Thomas Seegmuller ()
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Stefano Bosi: EPEE, Université d’Evry
Thomas Seegmuller: CNRS and EUREQua

No 05-01, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: Macroeconomic dynamic models are often criticized because the households’ behavior is summarized by a representative agent and, then, they do not take into account consumers’ heterogeneity. Reconsidering the Woodford (1986) infinite-horizon model and the Reichlin (1986) OLG model, we show that the representative agent can be a good representation of heterogeneity in preferences, in order to study the local dynamics and the occurrence of endogenous fluctuations.

Keywords: Endogenous fluctuations; heterogeneous preferences; representative agent (search for similar items in EconPapers)
JEL-codes: C62 E32 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2005
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Citations: View citations in EconPapers (5)

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