Huggett Economies with Multiple Stationary Equilibria
Published in Journal of Economic Dynamics and Control, 2017
I learned reading Calvet (2001) how to obtain closed-form solutions in optimal savings problems. In 2017, I played around with this type of models to obtain closed-form solutions to Bewley-Huggett-Aiyagari models. I showed my notes to Jinhui Bai who happens to be a Yale graduate with the same set of advisors as me (Truman Bewley, John Geanakoplos, and Tony Smith) and knows the literature well, and he pointed me to Wang (2003). I played around further, and given my recent interest in uniqueness and multiplicity of equilibria, I constructed examples of Huggett economies with multiple stationary equilibria. I wrote the paper in a week and initially submitted it to JET and got rejected, but the reports were rather good so I sent the paper to JEDC with JET reports attached, and I had a smooth review process there.