Abstract
This paper considers an economy which is populated by a continuum of identical families consisting of two members. The two members have different productivities and the family faces a fixed utility cost if both members supply labor simultaneously. Although both family members have the same preferences, they display very different elasticities of labor supply. A real business cycle model is calibrated and it is seen that this cross-sectional heterogeneity results in interesting forms of aggregation bias.
Original language | English (US) |
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Pages (from-to) | 233-245 |
Number of pages | 13 |
Journal | Journal of Monetary Economics |
Volume | 21 |
Issue number | 2-3 |
DOIs | |
State | Published - 1988 |
Externally published | Yes |
All Science Journal Classification (ASJC) codes
- Finance
- Economics and Econometrics