Robust Comparative Statics in Large Dynamic Economies

Daron Acemoglu and Martin Jensen

No 18178, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We consider infinite horizon economies populated by a continuum of agents who are subject to idiosyncratic shocks. This framework contains models of saving and capital accumulation with incomplete markets in the spirit of works by Bewley, Aiyagari, and Huggett, and models of entry, exit and industry dynamics in the spirit of Hopenhayn's work as special cases. Robust and easy-to-apply comparative statics results are established with respect to exogenous parameters as well as various kinds of changes in the Markov processes governing the law of motion of the idiosyncratic shocks. These results complement the existing literature which uses simulations and numerical analysis to study this class of models and are illustrated using a number of examples.

JEL-codes: C61 D90 E21 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-bec and nep-dge
Note: EFG IO ME
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Citations: View citations in EconPapers (6)

Published as Daron Acemoglu & Martin Kaae Jensen, 2015. "Robust Comparative Statics in Large Dynamic Economies," Journal of Political Economy, University of Chicago Press, vol. 123(3), pages 587 - 640.

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Related works:
Journal Article: Robust Comparative Statics in Large Dynamic Economies (2015)
Working Paper: Robust Comparative Statics in Large Dynamic Economies (2012)
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