Heterogeneity and Economics: Inequality and Financial Imperfections

The main paradigm in macroeconomics is shifting towards heterogeneous agents models, which are able to account for inequalities and financial imperfections. This evolution comes from new policy questions after the financial crisis, but also from the availability of individual data, which allows a better connection between theories and data. Within these models, financial markets are incomplete and a concept of liquidity naturally arises. This article presents the recent results in this dynamic literature, as the analysis of the inequalities in the United States, the need for a world liquidity, the effect of the public debt on asset prices, or the extent of precautionary saving of households.