Speaker: Tomohiro Hirano , Royal Holloway
Tomohiro Hirano (Royal Holloway, University of London), Jose Scheinkman (Columbia University), and Makoto Nirei (University of Tokyo)
We develop a simple macroeconomic model with heterogeneous agents that generates the stationary distribution of wealth with Pareto tail endogenously. We first show under what conditions the stationary distribution of wealth with Pareto tail emerges endogenously. Then, we show a connection between wealth concentration toward the top, asset bubbles, and macroeconomic instability.