Heterogeneity In The Degree Of Quasi-Geometric Discounting: The Distributional Implications

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Heterogeneity In The Degree Of Quasi-Geometric Discounting: The Distributional Implications

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Lilia Maliar () (Universidad de Alicante)
Serguei Maliar (Universidad de Alicante)

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Abstract

This paper modifies the standard one-sector growth model with uninsurable idiosyncratic risk and liquidity constraints to include multiple types of quasi-geometric consumers. For a calibrated version of the model, we show that a modest difference between the quasi-geometric discounting parameters of types can lead to large differences in their marginal propensities to consume. Unlike the standard one-sector growth model, the model with heterogeneous quasi-geometric consumers can generate realistic degrees of wealth inequality.

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Publisher Info
Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2003-28.

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Length: 26 pages
Date of creation: Aug 2003
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2003-28

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References listed on IDEAS
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Other versions:
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Other versions:
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