Asset prices and wealth inequality in a simple model with idiosyncratic shocks
This paper analytically solves a heterogeneous agent model with idiosyncratic shocks to marginal utility of consumption and explores the effects of the borrowing constraint on the price of the asset, the composition of borrowers and lenders in the credit market, and wealth inequality. Results are...
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| Format: | Article |
| Language: | English |
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Universidad de Chile
2017-04-01
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| Series: | Estudios de Economía |
| Online Access: | https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/45216 |
| Summary: | This paper analytically solves a heterogeneous agent model with idiosyncratic
shocks to marginal utility of consumption and explores the effects of the borrowing
constraint on the price of the asset, the composition of borrowers and lenders in
the credit market, and wealth inequality. Results are derived in a stylized model
and in a pedagogical fashion. |
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| ISSN: | 0304-2758 0718-5286 |