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Heterogeneity In The Degree Of Quasi-Geometric Discounting: The Distributional Implications

Author

Listed:
  • Lilia Maliar

    (Universidad de Alicante)

  • Serguei Maliar

    (Universidad de Alicante)

Abstract

This paper modifies the standard one-sector growth model with uninsurable idiosyncratic risk and liquidity constraints to include multiple types of quasi-geometric consumers. For a calibrated version of the model, we show that a modest difference between the quasi-geometric discounting parameters of types can lead to large differences in their marginal propensities to consume. Unlike the standard one-sector growth model, the model with heterogeneous quasi-geometric consumers can generate realistic degrees of wealth inequality.

Suggested Citation

  • Lilia Maliar & Serguei Maliar, 2003. "Heterogeneity In The Degree Of Quasi-Geometric Discounting: The Distributional Implications," Working Papers. Serie AD 2003-28, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2003-28
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    References listed on IDEAS

    as
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