We obtain a recursive formulation for a general class of contracting problems involving incentive constraints. These constraints make the corresponding maximization sup problems non-recursive. Our approach consists of studying a recursive Lagrangian. Under standard general conditions, there is a...

This article proposes a new measure of civil war. The measure defines violence intensity in casualties per capita instead of number of casualties. We discuss the assumptions behind this per capita model and the existing standard model. We show that the two measures behave differently in standard...

Empirical studies assume that the macro Mincer return on schooling is constant across countries. Using a large sample of countries this paper shows that countries with a better quality of education have on average relatively higher macro Mincer coefficients. As rich countries have on average...

In this paper, we construct and estimate a unified model combining three of the main sources of cross-country income disparities: differences in factor endowments, barriers to technology adoption and the inappropriateness of frontier technologies to local conditions. The key components of our...

We study the extent of macroeconomic convergence/divergence among euro area countries. Our analysis focuses on four variables (unemployment, inflation, relative prices and the current account), and seeks to uncover the role played by monetary union as a convergence factor by using non-euro...

The matching function - a key building block in models of labor market frictions - implies that the job finding rate depends only on labor market tightness. We estimate such a matching function and …find that the relation, although remarkably stable over 1967-2007, broke down spectacularly...

This paper points out an empirical puzzle that arises when an RBC economy with a job matching function is used to model unemployment. The standard model can generate sufficiently large cyclical fluctuations in unemployment, or a sufficiently small response of unemployment to labor market...

The standard New Keynesian model with staggered wage setting is shown to imply a simple dynamic relation between wage inflation and unemployment. Under some assumptions, that relation takes a form similar to that found in empirical wage equationsstarting from Phillips(1958) original workand may...

Existing models of equilibrium unemployment with endogenous labor market participation are complex, generate procyclical unemployment rates and cannot match unemployment variability relative to GDP. We embed endogenous participation in a simple, tractable job market matching model, show...

Over the past two decades, technological progress in the United States has been biased towards skilled labor. What does this imply for business cycles? We construct a quarterly skill premium from the CPS and use it to identify skill-biased technology shocks in a VAR with long-run restrictions....