Entrepreneurial wealth accumulation in equilibrium: collateral constraints

Irasema Alonso ()
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Irasema Alonso: Economics Yale University

No 691, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: This paper explores equilibrium theory of wealth accumulation and wealth inequality when entrepreneurs have collateral constraints and are subject to idiosyncratic productivity shocks. The model is an extension of Kiyotaki-Moore's setting to incorporate shocks and, at the same time, is a version of the precautionary-savings models due to Bewley, Aiyagari, and others (since entrepreneurs are risk-averse). The model is used to address questions about the determinants of inequality and aggregate productivity, both with an without exogenous technical change, and about aggregate savings policy influences these variables

Keywords: entrepreneurs; capital accumulation; collateral constraints (search for similar items in EconPapers)
JEL-codes: D30 D9 E0 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed006:691

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