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A General Equilibrium Model of Earnings, Income, and Wealth

Rene Glawion, Marc Puche and Frédéric Haller

VfS Annual Conference 2020 (Virtual Conference): Gender Economics from Verein für Socialpolitik / German Economic Association

Abstract: We develop a general equilibrium model of earnings, income and wealth heterogeneity in continuous time. We extend existing analytical and numerical methods to solve the model. We calibrate the model to U.S. data and find that stochastic interest rates provide a mechanism to link earnings, income and wealth distributions. We use this connection to demonstrate that an increase in unemployment benefits leads to a rise in steady state wealth inequality measured by the Gini coefficient.

Keywords: Incomplete Markets; Fokker-Planck Equations; Wealth Distributions; Computable General Equilibrium Models (search for similar items in EconPapers)
JEL-codes: C68 D31 E21 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-dge, nep-mac and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc20:224580

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