The theoretical literature on business cycles predicts a positive investment response to productivity improvements. In this work we question this prediction from theoretical and empirical standpoints. We fiÂ…rst show that a negative short-term response of investment to a positive technology...

We apply a three-tier hierarchical model of regulation, developed along the lines of Laffont and Tirole’s (1993), to an adverse selection problem in the corporate bond market. The bank brings the bonds to the market and informs the potential buyers about the bonds’ risk; a unique...

The debate on the response of hours worked after productivity improvements is still an open issue in the theoretical and empirical literature. In this work we show that, once conditional correlations are taken into account, both hours and investment decline temporarily following a positive...

By introducing search and matching frictions in both the labor and the credit markets into a cash in advance New Keynesian DSGE model, we provide a novel explanation of the incomplete pass-through from policy rates to loan rates. We show that this phenomenon is ineradicable if banks possess some...

By estimating a Markov-switching model, we provide new evidence on the nonlinear effects of monetary policy shocks on asset prices and on their bubble component. We show that regime-dependence is mainly driven by the states affecting the interest rate equation. We also show that, following a...

We study the economic effects generated by the proliferation of the Covid-19 epidemic and the implementation of non-pharmaceutical interventions by developing a SEIRD-RBC model, where the outbreak and policy interventions shape the labor input dynamic. We microfoundan Epidemic-Macro model...

We study the economic effects generated by the proliferation of the Covid-19 epidemic and the implementation of non-pharmaceutical interventions by developing a SEIRD-Macro model, where the outbreak and policy interventions shape the labour input dynamic. We microfound an Epidemic-Macro model...

Inequality in South Africa is the enduring legacy of racial discrimination. We use a dynamic perspective to show the linkages between persistent effects of discrimination in the labour market and the efficacy of redistributive fiscal policy in reducing inequality. We present a machine-learning...

This paper adds to the large literature on the e¤ects of technology shocks empirically and theoretically. Using a SVEC model, we …rst show that not only hours but also investment decline temporarily following a technology improvement. This result is robust with respect to important data and...

This paper presents a simple Overlapping Generation Model (OLG), aug-mented with Prospect Theory elements in the spirit of al-Nowaihi and Dhami (2007). Themodel tackle several open questions in the analysis of tax evasion and compliance decisions. In particular, the paper presents a new and...