The political consequences of Rationality for Inequality


Macro/finance models often assume one representative agent with rational expectations. However a growing literature shows that relaxing this assumption leads to very different policy implications. These new approaches lead to new reasons for inequalities of income, wealth and welfare. A unified framework which studies consequences for inequality of policymaking, by modelling agent-diversity of expectations has not yet been undertaken.

This proposal addresses the gap by augmenting standard micro-founded DSGEs with agent-based expectation mechanisms. The goal is to highlight new policy guidelines taking into account also relevant policy impact on inequality.

This opportunity will remain open until a suitable candidate has been found.

To apply please click here