John Hassler

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We embed a simple linear model of the carbon cycle in a standard neoclassical growth model where one input to the production function, oil, is non-renewable. The use of oil generates carbon emission, the key input in the carbon cycle. Changes in the amount of carbon in the atmosphere drive the greenhouse e¤ect and thereby the climate. Climate change is(More)
Can variations in risk cause non-negligible fluctuations in the flow of investment? This issue has so far only been studied in models with a fixed level of risk. Comparative statics may be inadequate, since risk varies over time. In this paper, a simple irreversible investment model is extended by including a stochastic process for the risk level. An(More)
This paper provides an analytical characterization of Markov perfect equilibria in a model with repeated voting, where agents vote over distortionary income redistribution. A key result is that the future constituency for redistributive policies depends positively on current redistribution, since this a¤ects both private investments and the future(More)
How does the size of the transfer system evolve in the short and in the long run? We model income redistribution as determined by voting among individuals of different types and income realizations. Taxation is distortionary because it discourages effort to accumulate human capital. Voters are fully rational, realizing that transfers have implications also(More)
This paper develops a model that integrates the climate and the global economy— an integrated assessment model—with which different policy scenarios can be analyzed and compared. The model is a dynamic stochastic general-equilibrium setup with a continuum of regions. Thus, it is a full stochastic general-equilibrium version of RICE, Nordhaus’s pioneering(More)
This paper develops a model with multiple steady states (low tax and unemployment rate versus high tax and unemployment rate) in which equilibrium selection is not conditioned on a sunspot variable. Instead, large enough shocks initiate unavoidable transitions from one regime to the other. The predictions of this paper are consistent with the persistent(More)
We propose an alternative method for measuring intergenerational mobility. Measurements obtained from traditional methods (based on panel data) are scarce, difficult to compare across countries and almost impossible to get across time. In particular, this means that we do not know how intergenerational mobility is correlated with growth, income or the(More)
Previous work by has shown that lumpy investment models well characterize individual expenditures on durables, in particular automobiles. In that class of models, a higher level of uncertainty generally implies that the household should tolerate a larger imbalance between the actual stock of the durable and the target stock before closing it by buying(More)
We propose a new methodology for measuring intergenerational mobility in economic wellbeing. Our method is based on the joint distribution of surnames and economic outcomes. It circumvents the need for intergenerational panel data, a long-standing stumbling block for understanding mobility. A single cross-sectional dataset is sufficient. Our main idea is(More)