What model features and calibration strategies yield a large average marginal propensity to
consume (MPC) in heterogeneous agent models? Through a systematic investigation of …

This paper reviews recent research on the relationship between central bank policies and
inequality. A new paradigm which integrates sticky‐prices, incomplete markets, and …

In this essay, we discuss the emerging literature in macroeconomics that combines
heterogeneous agent models, nominal rigidities, and aggregate shocks. This literature …

Abstract We recast the Aiyagari–Bewley–Huggett model of income and wealth distribution in
continuous time. This workhorse model—as well as heterogeneous agent models more …

Do wealthier households save a larger share of their incomes than poorer ones? We use
Norwegian administrative panel data on income and wealth to answer this empirical …

Why are some people wealthy while others are poor? To what extent can governments affect
inequality? Which instruments should they use? Answering these questions requires …

We use sizable lottery prizes in Norwegian administrative panel data to explore how
transitory income shocks are spent and saved over time and how households' marginal …

We propose a general and highly efficient method for solving and estimating general
equilibrium heterogeneous‐agent models with aggregate shocks in discrete time. Our …

In response to the COVID-19 pandemic, large parts of the economy were locked down and,
as a result, households' income risk rose sharply. At the same time, policy makers put …

In a model calibrated to match micro‐and macroeconomic evidence on household income
dynamics, we show that a modest degree of heterogeneity in household preferences or …