NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Yves Achdou

UFR de Mathématiques
Université Paris Diderot
bureau 5D19
175 rue du Chevaleret
75013 Paris
France

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Université Paris-Diderot

NBER Working Papers and Publications

August 2017Income and Wealth Distribution in Macroeconomics: A Continuous-Time Approach
with Jiequn Han, Jean-Michel Lasry, Pierre-Louis Lions, Benjamin Moll: w23732
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 generally – then boils down to a system of partial differential equations, a fact we take advantage of to make two types of contributions. First, a number of new theoretical results: (i) an analytic characterization of the consumption and saving behavior of the poor, particularly their marginal propensities to consume; (ii) a closed-form solution for the wealth distribution in a special case with two income types; (iii) a proof that there is a unique stationary equilibrium if the intertemporal elasticity of substitution is weakly greater than one; (iv) characterization of “soft” borrowing constraints. Second, we develop a simple...
 
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