EconPapers    
Economics at your fingertips  
 

Computing General Equilibrium Models with Occupational Choice and Financial Frictions

António Antunes, Tiago Cavalcanti and Anne Villamil

Macroeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: This paper establishes the existence of a stationary equilibrium and a procedure to compute solutions to a class of dynamic general equilibrium models with two important features. First, occupational choice is determined endogenously as a function of heterogeneous agent type, which is defined by an agents managerial ability and capital bequest. Heterogeneous ability is exogenous and independent across generations. In contrast, bequests link generations and the distribution of bequests evolves endogenously. Second, there is a financial market for capital loans with a deadweight intermediation cost and a repayment incentive constraint. The incentive constraint induces a non-convexity. The paper proves that the competitive equilibrium can be characterized by the bequest distribution and factor prices, and uses the monotone mixing condition to ensure that the stationary bequest distribution that arises from the agents optimal behavior across generations exists and is unique. The paper next constructs a direct, non-parametric approach to compute the stationary solution. The method reduces the domain of the policy function, thus reducing the computational complexity of the problem.

Keywords: Existence; Computation; Dynamic general equilibrium; Non-convexity (search for similar items in EconPapers)
JEL-codes: C62 C63 E60 G38 (search for similar items in EconPapers)
Date: 2006-01
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.eaber.org/node/22560 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 301 [REDIRECT LOOP] Moved Permanently (http://www.eaber.org/node/22560 [301 Moved Permanently]--> https://www.eaber.org/node/22560 [301 Moved Permanently]--> https://www.eaber.org/node/22560 [301 Moved Permanently]--> https://www.eaber.org/node/22560 [301 Moved Permanently]--> https://www.eaber.org/node/22560 [301 Moved Permanently]--> https://www.eaber.org/node/22560 [301 Moved Permanently]--> https://www.eaber.org/node/22560 [301 Moved Permanently]--> https://www.eaber.org/node/22560)

Related works:
Journal Article: Computing general equilibrium models with occupational choice and financial frictions (2008) Downloads
Working Paper: Computing General Equilibrium Models with Occupational Choice and Financial Frictions (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eab:macroe:22560

Access Statistics for this paper

More papers in Macroeconomics Working Papers from East Asian Bureau of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Shiro Armstrong (shiro.armstrong@anu.edu.au).

 
Page updated 2025-01-07
Handle: RePEc:eab:macroe:22560