Papers
Optimal unemployment benefits over the business cycle
This LeGrand and Ragot (2022a) solves for optimal unemployment benefit over the business cycle in a simple environment. The uniform truncation method is presented, such as the algorithm to solve for steady state policies, and for the optimal dynamics of the instruments.
The Appendix of the paper also contains other important results.
It is shown in Appendix A that the truncation can be constructed as model of partial insurance within islands. This gives a theoretical foundtation of the truncation.
It is shown in Appendix B.3 that the allocation of the truncated model converges to the allocation of the full-fledged Bewley mode, when the length of the truncation increases.
In Appendix E.1, we provide additional results about the Lagrange multipliers on the Euler equations in heterogeneous agent models. The multipliers can be positive or negative?
Truncation and Transitions
This LeGrand and Ragot (2022b) uses the uniform truncation method to solve a simple problem, which is the provision of a public good. The truncation method is then compared to other methods using transitions, to check its acuracy.
It is also shown that simple method using transitions (with fixed instruments) are not consistent for two reasons :
The value of the instrument depends on initial conditions, which is not the case in the true Ramsey problem.
The value of the instrument using transitions doesn’t onverge to the true value of a Ramsey problem, due to a time-inconsistency issue in heterogeneous-agent models (coming from market incompleteness)
Refined truncation
This LeGrand and Ragot (2022c) presents the refined truncation to solve model with aggregate shocks.
Optimal Monetary policy
This Le Grand, Martin-Baillon, and Ragot (2022) solves for optimal monetary policy in HANK model with capital, with different assumptions concerning fiscal policy. The solution method uses both the uniform and the refined truncation.
Optimal fiscal policy
This LeGrand and Ragot (2022d) solves for optimal fiscal policy, with a special focus on optimal public debt dynamics.
Fiscal policy raises specific issues, such as the existence of a steady-state equilibrium in heterogeneous agent models. These issues are discussed in the paper.
Finite state-space model
This Handbook Ragot (2018) presents different finiate state space models to solve heterogeneous-agent models. It presents zero-liquidity model, small liquidity model, and the truncation method.
Social Welfare Functions
This LeGrand, Ragot, and Rodrigues (2022) estimates social welfare functions in the US and in France using the inverse optimal approach in general equilibrium.
References