A Note On Entrepreneurial Risk, Capital Market Imperfections, And Heterogeneity
AbstractEmpirical evidence shows that entrepreneurs hold a large fraction of wealth, have higher saving rates than workers, and face substantial uninsurable entrepreneurial and investment risks. This paper constructs a heterogeneous-agent general equilibrium model with uninsurable entrepreneurial risk and capital market imperfections to explore the implications of uninsurable entrepreneurial risk for wealth distribution and aggregate activity in an incomplete market economy. It is shown that entrepreurial risk can substantially affect both the wealth distribution and the macroeconomy.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal Macroeconomic Dynamics.
Volume (Year): 14 (2010)
Issue (Month): 02 (April)
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Other versions of this item:
- Yulei Luo & Liutang Gong & Heng-fu Zou, 2010. "A Note on Entrepreneurial Risk, Capital Market Imperfections, and Heterogeneity," CEMA Working Papers 409, China Economics and Management Academy, Central University of Finance and Economics.
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