This paper considers the revaluation of nominal wealth as a channel for aggregate and welfare eff... more This paper considers the revaluation of nominal wealth as a channel for aggregate and welfare effects of inflation. In a calibrated OLG model, an inflation episode is viewed as an unanticipated shock to the wealth distribution that hurts old lenders and helps young borrowers. While the redistribution shock is zero-sum, households respond asymmetrically, which generates a decrease in labor supply as well as an in-crease in savings. Although inflation-induced redistribution has a persistent negative effect on output, it improves the weighted welfare of domestic households.
Matthias Doepke is Associate Professor of Economics at UCLA. He is interested in the economic gro... more Matthias Doepke is Associate Professor of Economics at UCLA. He is interested in the economic growth and development, demographic change, political economics, and monetary economics.
This paper,provides,a quantitative,assessment,of the effects of inflation through changes,in the ... more This paper,provides,a quantitative,assessment,of the effects of inflation through changes,in the value of nominal,assets. We document,nominal,positions in the U.S. across sectors as well as different groups of households, and estimate the redistribu- tion brought,about by a moderate,inflation episode. Redistribution takes the form of “ends-against-the-middle:” the middle,class gains at the cost of the rich and poor. In addition, inflation favors the
Episodes of unanticipated inflation reduce the real value of nominal claims and thus redistribute... more Episodes of unanticipated inflation reduce the real value of nominal claims and thus redistribute wealth from lenders to borrowers. In this study, we consider redistribution as a channel for aggregate and welfare effects of inflation. We model an inflation episode as an unanticipated shock to the wealth distribution in a quantitative overlapping-generations model of the U.S. economy. While the redistribution
ABSTRACT We construct a theory of intergenerational preference transmission that rationalizes the... more ABSTRACT We construct a theory of intergenerational preference transmission that rationalizes the choice between alternative parenting styles (related to Baumrind 1967). Parents maximize an objective function that combines Beckerian and paternalistic altruism towards children. They can affect their children’s choices via two channels: either by influencing their preferences or by imposing direct restrictions on their choice sets. Different parenting styles (authoritarian, authoritative, and permissive) emerge as equilibrium outcomes, and are affected both by parental preferences and by the socioeconomic environment. We consider two applications: patience and risk aversion. We argue that parenting styles may be important for explaining why different groups or societies develop different attitudes towards human capital formation, entrepreneurship, and innovation.
This paper considers the revaluation of nominal wealth as a channel for aggregate and welfare eff... more This paper considers the revaluation of nominal wealth as a channel for aggregate and welfare effects of inflation. In a calibrated OLG model, an inflation episode is viewed as an unanticipated shock to the wealth distribution that hurts old lenders and helps young borrowers. While the redistribution shock is zero-sum, households respond asymmetrically, which generates a decrease in labor supply as well as an in-crease in savings. Although inflation-induced redistribution has a persistent negative effect on output, it improves the weighted welfare of domestic households.
Matthias Doepke is Associate Professor of Economics at UCLA. He is interested in the economic gro... more Matthias Doepke is Associate Professor of Economics at UCLA. He is interested in the economic growth and development, demographic change, political economics, and monetary economics.
This paper,provides,a quantitative,assessment,of the effects of inflation through changes,in the ... more This paper,provides,a quantitative,assessment,of the effects of inflation through changes,in the value of nominal,assets. We document,nominal,positions in the U.S. across sectors as well as different groups of households, and estimate the redistribu- tion brought,about by a moderate,inflation episode. Redistribution takes the form of “ends-against-the-middle:” the middle,class gains at the cost of the rich and poor. In addition, inflation favors the
Episodes of unanticipated inflation reduce the real value of nominal claims and thus redistribute... more Episodes of unanticipated inflation reduce the real value of nominal claims and thus redistribute wealth from lenders to borrowers. In this study, we consider redistribution as a channel for aggregate and welfare effects of inflation. We model an inflation episode as an unanticipated shock to the wealth distribution in a quantitative overlapping-generations model of the U.S. economy. While the redistribution
ABSTRACT We construct a theory of intergenerational preference transmission that rationalizes the... more ABSTRACT We construct a theory of intergenerational preference transmission that rationalizes the choice between alternative parenting styles (related to Baumrind 1967). Parents maximize an objective function that combines Beckerian and paternalistic altruism towards children. They can affect their children’s choices via two channels: either by influencing their preferences or by imposing direct restrictions on their choice sets. Different parenting styles (authoritarian, authoritative, and permissive) emerge as equilibrium outcomes, and are affected both by parental preferences and by the socioeconomic environment. We consider two applications: patience and risk aversion. We argue that parenting styles may be important for explaining why different groups or societies develop different attitudes towards human capital formation, entrepreneurship, and innovation.
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Papers by Matthias Doepke