scholarly journals On the Size of U.S. Government: Political Economy in the Neoclassical Growth Model

1999 ◽  
Vol 89 (5) ◽  
pp. 1156-1181 ◽  
Author(s):  
Per Krusell ◽  
José-Víctor Ríos-Rull
Keyword(s):  
Political Economy ◽  
Wealth Distribution ◽  
Size Of Government ◽  
Total Size ◽  
Tax Rate ◽  
Lump Sum ◽  
Consumption Choices ◽  
Dynamic Version ◽  
Income And Wealth Distribution ◽  
Neoclassical Growth

We study a dynamic version of Meltzer and Richard's median-voter model of the size of government. Taxes are proportional to total income, and they are redistributed as equal lump-sum transfers. Voting takes place periodically over time, and each consumer votes for the tax rate that maximizes his equilibrium utility. We calibrate the model to U.S. data. Key elements in the calibration are the income and wealth distribution and the parameters governing the leisure and consumption choices. The total size of transfers predicted by our political-economy model is quite close to the size of transfers in the data. (JEL E60, H11, P16)

scholarly journals Fashion and Business Cycles with Snobs and Bandwagoners in a Multi-Sector Growth Model

2017 ◽  
Vol 2 (3) ◽  
Author(s):  
Wei-Bin Zhang
Keyword(s):  
Business Cycles ◽  
Growth Model ◽  
Wealth Distribution ◽  
Growth Theory ◽  
Preference Change ◽  
Dynamic Growth ◽  
Income And Wealth Distribution ◽  
Independent Parameters ◽  
Neoclassical Growth Theory ◽  
Neoclassical Growth

<p>This paper generalizes the dynamic growth model with interactions between fashion, economic growth and income and wealth distribution recently built by Zhang (2016). The modelling of fashion and preference change is inspirited by the economic model of fashion recently published by Giovinazzo and Naimzada (2015). This study introduces fashion into neoclassical growth theory. The original model is based on some ideas in the literature of economics of fashion. This study generalizes Zhang’s model by making all the time-independent parameters as time-dependent parameters. We simulate the motion of the economic system. We carry out comparative dynamic analysis with regard to periodic perturbations in some parameters. We show how exogenous period changes in these parameters lead to business cycles. </p>

scholarly journals Income and Wealth Distribution in Macroeconomics: A Continuous-Time Approach

2021 ◽  
Author(s):  
Yves Achdou ◽  
Jiequn Han ◽  
Jean-Michel Lasry ◽  
Pierre-Louis Lions ◽  
Benjamin Moll
Keyword(s):  
Continuous Time ◽  
Wealth Distribution ◽  
Closed Form Solution ◽  
Form Solution ◽  
Heterogeneous Agent ◽  
Saving Behavior ◽  
Income And Wealth Distribution ◽  
Heterogeneous Agent Models ◽  
Special Case

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 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. Second, we develop a simple, efficient and portable algorithm for numerically solving for equilibria in a wide class of heterogeneous agent models, including – but not limited to – the Aiyagari-Bewley-Huggett model.

The National Infrastructure Reserve Bank

2016 ◽  
Vol 22 (1) ◽  
pp. 38-48
Author(s):  
Stephen M. Hubbard
Keyword(s):  
Life Cycle ◽  
Life Cycle Costs ◽  
National Politics ◽  
Size Of Government ◽  
Total Size ◽  
Reserve Bank ◽  
Deferred Maintenance ◽  
Reducing Costs ◽  
National Infrastructure

This article examines the implementation of a novel national infrastructure bank (NIB) which coins or “makes” U.S. currency to provide capital for infrastructure loans. This approach eliminates bond expense while reducing long-term life cycle costs caused by deferred maintenance and construction inflation. It also addresses the three main issues that have blocked prior NIB proposals by providing a near zero-cost source of capital, reducing the total size of government employment, and isolating funding from national politics while reducing costs by US$75 to US$220 billion and creating up to three million or more jobs annually.

Sign in / Sign up

Export Citation Format

Share Document