Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/256903 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
KRTK-KTI Working Papers No. KRTK-KTI WP - 2021/32
Publisher: 
Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies, Budapest
Abstract: 
The goal of this paper is to analyze the connections Hungarian income and wealth distribution on the one hand, and the macroeconomics impacts of the global financial crisis of 2007-2008 on the other hand. To do this, I build a heterogenous agent, dynamic, general equilibrium model, which I calibrate using Hungarian income distribution data before the crisis. The model is then used to study both the impact of the financial crisis on income and wealth inequality, and the role of income and wealth inequality in the macroeconomic developments after the crisis. Results indicate that (i) the long-run capital stock rises, and the interest rate falls, but the effect is quantitatively small; (ii) the long-run income and wealth distributions only change moderately; and (iii) the short-run consumption response of low-wealth household is very strong, and drives a sizable aggregate consumption drop as well.
Subjects: 
heterogeneity
income shocks
simulations
borrowing constraint
JEL: 
C63
E21
E44
E47
Document Type: 
Working Paper

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