Robust Comparative Statics in Large Dynamic Economies

Acemoglu, Daron; Jensen, Martin Kaae

Abstract

We consider infinite-horizon economies populated by a continuum of agents subject to idiosyncratic shocks. This framework contains models of saving and capital accumulation with incomplete markets in the spirit of works by Bewley, Aiyagari, and Huggett; models of entry, exit, and industry dynamics in the spirit of Hopenhayn’s work; and dynamic models of occupational choice and search models as special cases. Robust and easy-to-apply comparative statics results are established with respect to exogenous parameters as well as various kinds of changes in the Markov processes governing the law of motion of the idiosyncratic shocks.

Citation

Acemoglu, D., & Jensen, M. K. (2015). Robust Comparative Statics in Large Dynamic Economies. Journal of Political Economy, 123(3), 587-640. https://doi.org/10.1086/680685

• Journal Article Type: Article
• Acceptance Date: Dec 1, 2014
• Publication Date: 2015-06
• Deposit Date: Jun 22, 2020
• Publicly Available Date: Jun 22, 2020
• Journal: Journal of Political Economy
• Print ISSN: 0022-3808
• Electronic ISSN: 1537-534X
• Publisher: University of Chicago Press
• Peer Reviewed: Peer Reviewed
• Volume: 123
• Issue: 3
• Pages: 587-640
• DOI: https://doi.org/10.1086/680685
• Public URL: https://nottingham-repository.worktribe.com/output/4701152
• Publisher URL: https://www.journals.uchicago.edu/doi/abs/10.1086/680685