Karl Harmenberg

• Harmenberg, Karl (2024). Comments on Markus Sigonius: Develop­ments of auto­matic stabilisers in Sweden 1998–2022. Nordic Economic Policy Review. ISSN 1904-4526. doi: 10.6027/nord2024-001.
• Harmenberg, Karl (2024). A simple theory of Pareto-distributed earnings. Economics Letters. ISSN 0165-1765. 234. doi: 10.1016/j.econlet.2023.111492.
• Broer, Tobias; Harmenberg, Karl; Krusell, Per & Öberg, Erik (2023). Macroeconomic dynamics with rigid wage contracts. American Economic Review: Insights (AER). ISSN 2640-205X. 5(1), p. 55–72. doi: 10.1257/aeri.20210672. Full text in Research Archive Show summary

  We adapt the wage contracting structure in Chari (1983) to a dynamic, balanced-growth setting with recontracting as in Calvo (1983). The resulting wage-rigidity framework dampens income effects in the short run, thus allowing significant responses of hours to aggregate shocks. In reduced form, the model dynamics are similar to that in Jaimovich and Rebelo (2009), with their habit parameter replaced by our probability of wage-contract resetting. That is, if wage contracts are reset frequently, labor supply behaves in accordance with King, Plosser, and Rebelo (1988) preferences, whereas if they are never reset, we obtain the setting in Greenwood, Hercowitz, and Huffman (1988).

• Boppart, Timo; Harmenberg, Karl; Krusell, Per & Olsson, Jonna (2022). Integrated epi-econ assessment of vaccination. Journal of Economic Dynamics and Control. ISSN 0165-1889. 140. doi: 10.1016/j.jedc.2022.104308. Full text in Research Archive Show summary

  Using an integrated epi-econ model, we compute the value of vaccines for Covid-19, both under a planner’s solution and in competitive equilibrium. The specific model, developed in Boppart, Harmenberg, Hassler, Krusell, and Olsson (2020), factors in not just value-of-life aspects along with standard economic variables but also the value of leisure activities that rely on a social component. We find that the societal value of vaccination is large; we estimate that, translated into monetary terms, the value of vaccinating one young individual in the competitive equilibrium is $17,800. Externalities are large: less than half the societal value is internalized by individuals (assuming that they act purely in their self-interest). Finally, behavioral responses are important, with a substantial share of the value of vaccines being attributed to people enjoying more socially-oriented leisure when more people are vaccinated.

• Harmenberg, Karl & Öberg, Erik (2021). Consumption dynamics under time-varying unemployment risk. Journal of Monetary Economics. ISSN 0304-3932. 118, p. 350–365. doi: 10.1016/j.jmoneco.2020.10.004. Show summary

  In response to an adverse labor-market shock, a calibrated heterogeneous-agent model predicts that aggregate spending on durable goods falls mainly due to the ex-ante increase in income uncertainty caused by higher unemployment risk. In contrast, aggregate spending on nondurable goods falls mainly due to the ex-post income losses associated with realized unemployment spells. When households hold little liquid assets, the nondurable spending response is amplified, whereas the durable spending response is dampened. These differences stem from micro-level adjustment frictions involved in purchases of durable goods. The model is corroborated with evidence from micro survey data.

• Harbo Hansen, Niels-Jakob; Harmenberg, Karl; Öberg, Erik & Sievertsen, Hans (2021). Gender Disparities in Top Earnings: Measurement and Facts for Denmark 1980-2013. Journal of Economic Inequality. ISSN 1569-1721. doi: 10.1007/s10888-020-09476-1.
• Harmenberg, Karl (2021). Aggregating Heterogeneous-Agent Models with Permanent Income Shocks. Journal of Economic Dynamics and Control. ISSN 0165-1889. 129. doi: 10.1016/j.jedc.2021.104185. Full text in Research Archive Show summary

  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.

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• Harmenberg, Karl & Hernandez, Raysa Rosario Lizarraga (2022). An earnings process for the top.
• Harmenberg, Karl; Broer, Tobias; Druedahl, Jeppe & Öberg, Erik (2022). The unemployment-risk channel in business-cycle fluctuations.
• Harmenberg, Karl; Boppart, Timo; Hassler, John; Krusell, Per & Olsson, Jonna (2022). Integrated epi-econ assessment: quantitative theory.
• Harmenberg, Karl; Gulbrandsen, Magnus Andreas Haare; Fagereng, Andreas & Natvik, Gisle James (2022). Macro shocks in a micro laboratory: evidence on spousal income insurance, spending, and spillovers.
• Harmenberg, Karl; Broer, Tobias; Druedahl, Jeppe & Öberg, Erik (2022). The unemployment-risk channel in business-cycle fluctuations.
• Harmenberg, Karl; Broer, Tobias; Druedahl, Jeppe & Öberg, Erik (2022). The unemployment-risk channel in business-cycle fluctuations.
• Harmenberg, Karl; Broer, Tobias; Krusell, Per & Öberg, Erik (2022). Macroeconomic dynamics with rigid wage contracts.
• Harmenberg, Karl; Broer, Tobias; Druedahl, Jeppe & Öberg, Erik (2022). The unemployment-risk channel in business-cycle fluctuations.
• Boppart, Timo; Hassler, John; Harmenberg, Karl; Krusell, Per & Olsson, Jonna (2021). Integrated epi-econ assessment.
• Broer, Tobias; Druedahl, Jeppe; Harmenberg, Karl & Öberg, Erik (2021). The Unemployment-Risk Channel in Business-Cycle Fluctuations.
• Boppart, Timo; Harmenberg, Karl; Krusell, Per & Olsson, Jonna (2021). Integrated epi-econ assessment of vaccination.

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