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Heterogeneity in capital and skills in a neoclassical stochastic growth model

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  • Maliar, Lilia
  • Maliar, Serguei

Abstract

Does a heterogeneous agents version of a neoclassical model with labor-leisure choice replicatethe distributions of consumption and working hours observed in the cross-sectional data? Doesincorporating heterogeneity enhance the aggregate performance of the representative agentmodel? We address these questions in a complete market model economy with two sources ofheterogeneity: initial endowments and non-acquired skills. We find positive answers to bothquestions.
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  • Maliar, Lilia & Maliar, Serguei, 2001. "Heterogeneity in capital and skills in a neoclassical stochastic growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 25(9), pages 1367-1397, September.
  • Handle: RePEc:eee:dyncon:v:25:y:2001:i:9:p:1367-1397
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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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