10:36:46 From Lita-NBER Staff : Welcome to the NBER Summer Institute 2020 EFMM Workshop 10:51:00 From Mariacristina De Nardi to All panelists : Good morning everyone! 10:59:59 From Gustavo Ventura to All panelists : chats can be saved 11:00:52 From Lita-NBER Staff to All panelists : The chats are saved after the meeting 11:40:33 From Christian Moser to All panelists : I wonder if your model in the end is consistent with the lifetime earnings inequality calculations by Huggett, Ventura, and Yaron (2011, AER)? This might be a nice way of checking / disciplining your key mode mechanism. 11:41:14 From Titan Alon to All panelists : Yes! We plan to do this. Our environments are a little different, so we need to think hard about how to compare the results. But this is definitely on our to do list! 11:48:27 From Greg Kaplan to All panelists : I think he was planning on connecting at the start of the talkl 11:49:10 From Mariacristina De Nardi to All panelists : It would be really good to have the Q&A file from both today and yesterday. 11:50:16 From Christian Moser to All panelists : @Mariacristina: Agreed!! Lita Kimble from NBER informed me that chats are saved, but Q&As are not, unfortunately… 11:51:11 From Gianluca Violante to All panelists : You can copy and paste the Q&A and save it 11:51:18 From Gianluca Violante to All panelists : just select all 11:51:42 From Christian Moser to All panelists : Yes, wish I had done it yesterday before joining the breakout rooms… if anyone has it, we’d appreciate it! 12:06:01 From Christian Moser to All panelists : Following up on Luigi’s and Mariacristina’s questions: “In 2018, there were 12.3 million college and university students under the age of 25, and 7.6 million students who were 25 years old and over.” (Source: NCES, https://nces.ed.gov/fastfacts/display.asp?id=372) 12:12:02 From Greg Kaplan to Lita-NBER Staff(Privately) : Hi Lita, can you please promote Tom Sargent to be a Panelist ? 12:15:41 From Makoto Nakajima to All panelists : Is heterogeneous discount factor considered? Does life-cycle consumption profile look similar? 12:19:53 From Gianluca Violante to JOSE VICTOR Rios RULL and all panelists : hey victor, I can "upgrade you" to panelist on the next paper if you like, let me know 12:20:37 From Gianluca Violante : anyone else who wants to be "upgraded" let us know 12:21:53 From Lita-NBER Staff to Greg Kaplan(Privately) : You were made co-host at the beginning of the meeting. You changed back as a panelist when your internet dropped off. You have been made a co-host again. 12:22:29 From Greg Kaplan to Lita-NBER Staff(Privately) : Ah. That explains it. Thanks! 12:36:45 From Christian Moser to All panelists : Does the homogeneity of the returns to savings (r_t) matter for your result that capital taxes are less volatile than in the rep-agent economy? I would have expected the opposite based on the intuition that during a boom the wealth distribution fans out a lot, possibly due to heterogeneity in asset returns. 12:41:46 From Francois Le Grand to All panelists : Thanks for the question. Actually, there are two different underlying interest rates and we use a trick of the literature (a fund) to have a unique interest rate. The main gain is to simplify agents' portfolio choice which is not central to our analysis. For the effect you mention to be important, we would need to have a kind of separation: poor agents holding some asset, rich ones, holding other ones. We could then imagine a taxation on the second one (which would requires further assumptions). 12:42:18 From Christian Moser to All panelists : Right, that makes sense — thanks! 12:51:27 From Kurt Mitman to All panelists : GHH 12:53:20 From Christian Moser to All panelists : I’m not sure I understand how Slater’s condition — hence strong duality used by the Lagrangian methods — holds in your setup, even when considering FOCs as limits of some penalty functions… since your Euler equation has to hold with equality (inequality) for unconstrained (constrained) agents, this means two nonlinear inequality constraints. So how can you ever find an interior feasible point? 12:54:24 From pkehoe to All panelists : are the idiosyncratic productivity shocks the only idiosyncratic shocks? 12:55:01 From Francois Le Grand to All panelists : @pkehoe: yes. There is no unemployment here. In the truncation paper, there are two shocks. 12:57:31 From Francois Le Grand to All panelists : @Christian. Thank you for your question. There is no contradiction per se because constrained/unconstrained agents are on different consumption paths. So their intertemporal MRS are very different. Even with the same interest rate, there is no (obvious) impossibility. But admittedly no obvious solution neither. 12:58:13 From Christian Moser to All panelists : I think I mean something different. The Euler equation for unconstrained agents is an equality constrained = two inequality constraints. How can you ever be interior to that? 13:01:40 From Francois Le Grand to All panelists : Ok, sorry for misunderstanding! It is a two-step procedure: (i) find a set of credit-constrained agents (with Euler inequality); (ii) check that given this set of credit-constrained agents, we have an interior solution. 13:02:21 From Christian Moser to All panelists : Right, for constrained agents I can see this work. But for the planner’s problem you need to take into account both constrained and unconstrained agents, right? And then I don’t see how in this program you can find an interior feasible point. 13:04:14 From Francois Le Grand to All panelists : That may be a definition pb. An interior feasible point is such that: (i) equality constraints hold with equality, (ii) inequality constraints hold strictly. 13:05:46 From Christian Moser to All panelists : Correct me if I’m wrong but I believe that strict interiority is required for all nonlinear convex inequality constraints? 13:07:35 From Christian Moser to All panelists : See, e.g., https://inst.eecs.berkeley.edu/~ee227a/fa10/login/l_dual_strong.html 13:07:57 From Christian Moser to All panelists : Maybe I’m confused though, would be curious to learn more about it 13:09:24 From Francois Le Grand to All panelists : Thanks Christian. we'll need to think more about this. 13:16:41 From Manu De Veirman to All panelists : When monetary policy is set to enhance price stability, won't it have redistributive effects that might then be addressed by fiscal policy? 13:29:16 From Francois Le Grand to All panelists : That's a good question. Actually, we expected a similar effect but did not see any. Theoretically, capital tax could partially offset inflation effects. However, we did not observe that in our experiments. Maybe we need to shut down some additional fiscal channels (we did not explore all of the 8 possibilities). 13:32:32 From Francois Le Grand to All panelists : @Christian. Coming back to your remark. We went back to penalty functions precisely for your remark. We show that our FOCs are limits of FOCs of a pb with penalty function for which interiority does not raise any problem. But any further thought about it would be welcome! 13:38:36 From Gianluca Violante : Gianluca Violante is inviting you to a scheduled Zoom meeting. Topic: Break out rooms Time: Jul 14, 2020 01:30 PM Eastern Time (US and Canada) Join Zoom Meeting https://princeton.zoom.us/j/99207200387 Meeting ID: 992 0720 0387 13:40:31 From Adrien Auclert to All panelists : Agree with Kurt’s point on household nominal debt. Also, if the debt was longer-term, then there would be a lot more room for inflation to redistribute. 13:40:47 From Gianluca Violante : i agree too, that's crucial 13:42:34 From Makoto Nakajima to All panelists : Going to the negative asset position with mutual fund. 13:42:36 From Dirk Krueger to All panelists : But if the governments could tax wealth, and physical capital and nominal debt differentially (not the return on wealth), then inflation again seems an inferior tool. 13:42:57 From Carlos Garriga to All panelists : The presence/lack of secondary markets for these nominal, long-term, assets is also critical 13:49:29 From Christian Moser to All panelists : https://princeton.zoom.us/j/99207200387 13:49:32 From Gianluca Violante : Gianluca Violante is inviting you to a scheduled Zoom meeting. Topic: Break out rooms Time: Jul 14, 2020 01:30 PM Eastern Time (US and Canada) Join Zoom Meeting https://princeton.zoom.us/j/99207200387 Meeting ID: 992 0720 0387 13:58:34 From Dirk Krueger to All panelists : Gotta go. Good to see you all 13:58:49 From Simon Mongey to All panelists : Likewise, thanks guys!