Jay H. Hong

We investigate the welfare properties of the one-sector neoclassical growth model with uninsurable idiosyncratic shocks. We focus on the notion of constrained efficiency used in the general equilibrium literature. Our characterization of constrained efficiency uses the first-order condition of a constrained planner’s problem. This condition highlights the margins of relevance for whether capital is too high or too low: the factor composition of income of the (consumption-) poor. Using three ca

We find that technology's effect on employment varies greatly across manufacturing industries. Some industries exhibit a temporary reduction in employment in response to a permanent increase in TFP, whereas many more industries exhibit an employment increase in response to a permanent TFP shock. This raises serious questions about existing work that finds a labor productivity shock has a strong negative effect on employment. There are tantalizing and interesting differences between TFP and labor

Using life insurance holdings by age, sex, and marital status, we infer how individuals value consumption in different demographic stages. We estimate equivalence scales and bequest motives simultaneously within a fully specified model where agents face US demographics and save and purchase life insurance. Our findings indicate that individuals are very caring for dependents, that economies of scale are large, that children are very costly (or yield very high marginal utility), that wives with c

Abstract Over the past few decades, the skilled–unskilled hours differential for U.S. men increased when the skill premium rose sharply, in contrast with dominant income effects. Based on PSID data, we show that over the 1967–2000 period, skilled men experienced a three times larger increase in wage volatility than unskilled men. With the rise in wage volatility, our general equilibrium incomplete markets model generates a 2.7 hours increase in the hours differential whereas it increased by 1.4

We develop an heterogeneous agent model of consumption and health choices in order to estimate the effect of heath status in the marginal utility of consumption. We use micro data from the HRS, PSID, and CEX to identify the parameters of interest from the observed consumption growth for individuals in different health and education groups. We find that the marginal utility of consumption expenditure grows when health declines, which suggests that at old ages consumption expenditures are used to

We investigate the welfare properties of the one-sector neoclassical growth model with uninsurable idiosyncratic shocks. We focus on the notion of constrained efficiency used in the general equilibrium literature. Our characterization of constrained efficiency uses the first-order condition of a constrained planner's problem. This condition highlights the margins of relevance for whether capital is too high or too low: the factor composition of income of the (consumption-)poor. Using three calib

본 연구는 「세대 간 중첩모형(OLG)」을 이용하여 사망률 및 출산율 감소로 인한 인구고령화가 한국 경제에 미치는 영향을 정량적으로 분석하였다. 또한 고령화된 경제에서 정년연장 정책의 시행이 거시경제 전반에 미치는 효과를 살펴보았다. 사망률이 감소하는 경우, 기대수명의 증가로 장기화된 은퇴 후 소비에 대비하여 개인의저축이 늘어나고, 상대적으로 저축률이 높은 장년 및 고령층의 인구비율이 증가함에 따라총자본량이 크게 증가한다. 반면 사망률 감소로 인한 인구증가의 대부분이 60세 이상 고령층에 집중됨에 따라 총노동투입량의 증가는 미미하다. 출산율이 감소하는 경우, 총인구의 감소와 청·장년층 인구비율의 감소로 총노동투입량이 대폭 감소할 뿐만 아니라 총인구의 감소로 총저축도 크게 감소하여 총자본량도 큰 폭 하락한다. 한국 경제를 대상으로 모수설정을 통해 사망률(전 연령의 사망확률이 매년 1%씩 감소)과 출산율(인구증가율이 0.7%에서 0.3%로 하락)이 동시에 감소하는 고령화 경제의 영향을