This dissertation consists of three chapters. These chapters focus on:
Chapter 1, 'Pareto weights as wedges in two-country models', was written with Dave Backus, Axelle Ferriere, and Spencer Lyon. In this chapter we study how in models with recursive preferences, endogenous variation in Pareto weights would be interpreted as wedges from the perspective of a frictionless model with additive preferences. We describe the behavior of the relative Pareto weight in a two-country world and explore its interaction with consumption and the real exchange rate.
Chapter 2, 'Global Solution Methods for Macroeconomic Models', was written jointly with Spencer Lyon, Lilia Maliar, and Serguei Maliar. This chapter first discusses 7 global solution methods in the context of a simple neoclassical growth model and then introduces a new 8th global solution method in the context of a non-trivial New-Keynesian model. We first highlight how algorithm choice, even more than programming language, plays an important role in the speed that a model can be solved. The new method introduced in this paper is capable of solving a New-Keynesian model with an 8-dimensional state-space in mere seconds which makes it possible to perform model calibration.
In Chapter 3, 'The Cost of Income-Driven Repayment for Student Loans', I investigate a form of student loan repayment known as income-driven repayment. This type of loan repayment has received a significant amount of political support recently in the U.S. and there are new proposals that would make it so that all future student loans would be repaid under income-driven plans. I use a detailed model that incorporates pre, intra, and post college decisions to explore how income-driven might change enrollment and debt accumulation decisions, and how these changes might affect the required government subsidy to support the student loan program. I find that income-driven repayment would increase the cost of running the student loan program by 15% and that a significant portion of this cost comes from debt accumulated by those who are unlikely to graduate from college.
|Advisor:||Veldkamp, Laura L.|
|Commitee:||Sargent, Thomas, Waugh, Michael, Zin, Stanley|
|School:||New York University|
|School Location:||United States -- New York|
|Source:||DAI-A 81/2(E), Dissertation Abstracts International|
|Keywords:||Computational, Education economics, Income-driven loans, International, Labor economics, Macroeconomics|
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