Economic Consequences of Income Inequality
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چکیده
Nowhere is this separation greater than in representative agent models, which have been one of the dominant paradigms for studying business cycles, economic growth, and other macroeconomic phenomena. Not only do these models preclude us from studying the relationship between distribution and efficiency, but they also can be deeply misleading in the way they lead us to assess efficiency. Consider Robert Lucas’ (1987) calculation, based on a plausible calibration of an infinitely lived representative agent model, that the utility from eliminating fluctuations in consumption is the equivalent to the utility from a permanent increase in the level of consumption by 0.1 percent—or roughly $20 per person in 1998 and growing with consumption thereafter. Looked at another way, using more calibrations from Lucas (1987), the additional utility from eliminating the business cycle is equivalent to the additional utility from boosting the growth rate by 0.005 percentage points per year. If this is true, then,
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تاریخ انتشار 1999