Entrepreneurial wealth accumulation in equilibrium: collateral constraints
This paper explores equilibrium theory of wealth accumulation and wealth inequality when entrepreneurs have collateral constraints and are subject to idiosyncratic productivity shocks. The model is an extension of Kiyotaki-Moore's setting to incorporate shocks and, at the same time, is a version of the precautionary-savings models due to Bewley, Aiyagari, and others (since entrepreneurs are risk-averse). The model is used to address questions about the determinants of inequality and aggregate productivity, both with an without exogenous technical change, and about aggregate savings policy influences these variables
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|Date of creation:||03 Dec 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
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