| Item Type: |
Book Section
|
| Erschienen: |
2013 |
| Editors: |
Teglio, Andrea |
| Creators: |
Fischer, Thomas |
| Title: |
Inequality and Financial Markets - A Simulation Approach in a Heterogeneous Agent Model |
| Language: |
English |
| Title of Book: |
Managing Market Complexity - The Approach of Artificial Economics |
| Series Name: |
Lecture notes in economics and mathematical systems |
| Number: |
662 |
| Place of Publication: |
Berlin |
| Publisher: |
Springer |
| ISBN: |
978-3-642-31300-4 |
| Divisions: |
01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Fachgebiet Makroökonomie und Finanzmärkte |
| Date Deposited: |
27 Jul 2012 09:51 |
| Additional Information: |
JEL-Classification: C63 - D31 - E21 - E44 |
| Related URLs: |
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| Alternative keywords: |
| Alternative keywords | Language |
|---|
| Heterogeneous Agent Model - Inequality - Financial Market Stability - Consumption - Colateral Constraints- Debt | English |
|
| Alternative Abstract: |
| Alternative abstract | Language |
|---|
| This paper presents a dynamic model with N heterogeneous consumers in the presence of financial markets allowing for saving and lending. Instead of adjusting their consumption based on utility maximization, agents use heuristics as suggested by behavioral theory. The main result of the model is that increased income inequality transforms into increased net worth inequality leading to increased price volatility on the market for durables. Unequal societies moreover are characterized by a current account surplus resulting from strong savings. Price volatility also increases if we increase heritage defined as the ratio of stock level of initial endowment to annual income. Medium size heritage on the other side increases the number of middle class households leading to a balanced current account. Extreme low or extreme high values for heritage contribute to a net debt situation with foreigners. | English |
|
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