Managing Inequality over Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks

François Le Grand and Xavier Ragot
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François Le Grand: EM - EMLyon Business School

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Abstract: We present a truncation theory of idiosyncratic histories for heterogeneous agent models. This method allows us to derive optimal Ramsey policies in heterogeneous agent models with aggregate shocks, in general frameworks. We use this method to characterize the optimal level of unemployment insurance over the business cycle in a production economy, with occasionally binding credit constraints.

Keywords: Incomplete markets; Optimal policies; Heterogeneous agent models (search for similar items in EconPapers)
Date: 2020-12-01
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03476095v1
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Related works:
Journal Article: MANAGING INEQUALITY OVER BUSINESS CYCLES: OPTIMAL POLICIES WITH HETEROGENEOUS AGENTS AND AGGREGATE SHOCKS (2022)
Working Paper: Managing Inequality over Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks (2022)
Working Paper: Managing Inequality over Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks (2022)
Working Paper: Managing Inequality over Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks (2022)
Working Paper: Managing Inequality over Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks (2020)
Working Paper: Managing Inequality over Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks (2020)
Working Paper: Managing Inequality over the Business Cycles: Optimal Policies with Heterogeneous Agents and Aggregate Shocks (2019)
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