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Short-Run Patience and Wealth Inequality
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Lilia Maliar
Published/Copyright:
March 1, 2007
The quasi-geometric (hyperbolic) literature typically assumes that agents are short-run impatient. In this paper, we deviate from this assumption by considering an economy in which a fraction of the population is short-run patient and the remaining population is short-run impatient. In a calibrated version of a neoclassical growth model with uninsurable risk and liquidity constraints, we find that the presence of few short-run patient and many short-run impatient agents leads to empirically plausible degrees of wealth inequality.
Published Online: 2007-3-1
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
- Article
- Spurious Inference in the GARCH (1,1) Model When It Is Weakly Identified
- Gains from Synchronization
- Time Series Models for Forecasting: Testing or Combining?
- Short-Run Patience and Wealth Inequality
- A Smooth Transition Autoregressive Conditional Duration Model
- Fractionally Integrated Long Horizon Regressions
- A New Application of Exact Nonparametric Methods to Long-Horizon Predictability Tests
