糖心原创

Title: Growth, Cycles, and Inequality: Tracing the U.S. Economy in Analytical General Equilibrium

Abstract:
We develop a heterogeneous-household model with analytical equilibrium characterization for studying growth, business cycles, and distributional changes within a unified framework. Assuming log utility over consumption and leisure with a Stone-Geary subsistence level, we analytically characterize heterogeneous households’ policy functions under idiosyncratic labor and capital income risks. This enables closed-form policy function aggregation, where aggregate capital and the covariances of wealth with the two idiosyncratic risks are sufficient for the contemporaneous prices. Using these analytical results, we invert the model parameters at macro and micro levels, tracing the data without filtering either trend or cycle: U.S. macro variables for 1950–2019 recover the paths of TFP, the discount factor, and the leisure yield of wealth, and PSID/SIPP microdata recover each household’s labor productivity and returns. Using the inverted parameters, we analyze the distributional implications of technological progress and the aggregate implications of widening wage inequality.