The newsworthiness of an event is partly determined by how unusual it is and this paper investigates the business cycle implications of this fact. In particular, we analyze the consequences of information structures in which some types of signals are more likely to be observed after unusual...

We examine the relationship between institutions, culture and cyclical fluctuations for a sample of 45 European, Middle Eastern and North African countries. Better governance is associated with shorter and less severe contractions and milder expansions. Certain cultural traits, such as lack of...

We study the effect of the cycle on the health of newborn babies using 30 years of birth-certificate data for Spain. We find that babies are born healthier when the local unemployment rate is high. Although fertility is lower during recessions, the effect on health is not the result of...

The present paper describes recent research on two central themes of Keynes' General Theory: (i) the social waste associated with recessions, and (ii) the effectiveness of fiscal policy as a stabilization tool. The paper also discusses some evidence on the extent to which fiscal policy has been...

We study whether labor market institutions affect the volatility and correlations of macroeconomic variables for a sample of 20 OECD countries. Labor market rigidities are characterized with a number of indicators; volatilities and correlations are computed in several ways. Union coverage and...

A modern economy is an intricately linked web of specialized production units, each relying on the flow of inputs from their suppliers to produce their own output which, in turn, is routed towards other downstream units. In this essay, I argue that this network perspective on production linkages...

We study a dynamic economy where credit is limited by insufficient collateral and, as a result, investment and output are too low. In this environment, changes in investor sentiment or market expectations can give rise to credit bubbles, that is, expansions in credit that are backed not by...

This paper studies the macroeconomic implications of firmsprecautionary investment behavior in response to the anticipation of future financing constraints. Firms increase their demand for liquid and safe investments in order to alleviate future borrowing constraints and decrease the probability...

Many empirical studies have applied the Hodrick-Prescott fllter in cross- country comparisons of business cycle fluctuations. The Hodrick-Prescott filter involves the smoothing parameter, and standard practise in the literature is to set this parameter equal to 1600 (in quarterly data) for all...

We study the contribution of money to business cycle fluctuations in the US, the UK, Japan, and the Euro area using a small scale structural monetary business cycle model. Constrained likelihood-based estimates of the parameters are provided and time instabilities analyzed. Real balances are...