Aggregating heterogeneous-agent models with permanent income shocks
提出一种模拟异质性主体模型聚合动态的方法，通过构建永久收入中性测度来避免追踪永久收入分布，简化了模型模拟和解析分析。
I introduce a method for simulating aggregate dynamics of heterogeneous-agent models where log permanent income follows a random walk. The idea is to simulate the model using a counterfactual permanent-income-neutral measure which incorporates the effect that permanent income shocks have on macroeconomic aggregates. With the permanent-income-neutral measure, one does not need to keep track of the permanent-income distribution. The permanent-income-neutral measure is both useful for the analytical characterization of aggregate consumption-savings behavior and for simulating numerical models. Furthermore, it is trivial to implement with a few lines of code.