Buffer-stock saving in a Krusell–Smith world
Jiri Slacalek () and
Kiichi Tokuoka ()
Economics Letters, 2015, vol. 132, issue C, 97-100
We modify the widely-used Krusell and Smith (1998) model (KS) to accommodate an income process with permanent and transitory components. Appropriately calibrated permanent shocks help explain a substantial part of the empirical wealth heterogeneity unexplained in the baseline KS model.
Keywords: Household income process; Wealth inequality; Household heterogeneity (search for similar items in EconPapers)
JEL-codes: D12 D31 D91 E21 (search for similar items in EconPapers)
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Working Paper: Buffer-stock saving in a Krusell-Smith world (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:132:y:2015:i:c:p:97-100
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