Zoomers and Boomers: Asset Prices and Intergenerational Inequality

Leland Farmer and Roger Farmer

No 30419, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We construct a perpetual youth DSGE model with aggregate uncertainty in which there are dynamically complete markets and agents have Epstein-Zin preferences. We prove that, when endowments have a realistic hump-shaped age-profile, our model has three steady-state equilibria. One of these equilibria is dynamically inefficient and displays real price indeterminacy. We estimate the parameters of our model and we find that a fourth-order approximation around the indeterminate steady-state provides the best fit to U.S. data. Our work interprets the large and persistent generational inequality that has been observed in western economies over the past century as the result of uninsurable income shocks to birth cohorts.

JEL-codes: E44 G12 (search for similar items in EconPapers)
Date: 2022-09
New Economics Papers: this item is included in nep-dge
Note: AP IFM ME
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w30419.pdf (application/pdf)

Related works:
Working Paper: Zoomers and Boomers: Asset Prices and Intergenerational Inequality (2022)
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:nbr:nberwo:30419

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w30419

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().