Heterogeneous agents in overlapping-generations models for policy analysis

Project Lead: Marcus Hagedorn
Team: Thomas Davoine, Susanne Forstner, Michael Reiter
Duration: 2014 – 2016
Funding: OeNB-Jubiläumsfonds Project No. 15477

Policy makers have two concerns when designing reforms: avoid counterproductive feedback effects and avoid negative impacts on groups of households. Applied economists have quantitative tools to detect and measure each of these unwanted outcomes separately, but seldom together. We investigate the potential for making policy evaluation which deals with the two challenges at the same time, enriching an overlapping-generations model with theoretical components from heterogeneous agents theories under incomplete markets.