Researchers have incorporated labor or credit market frictions in isolation within simple neoclassical models to open up a role for institutions, inject realism into their models and examine the impact of these distortions on output and employment. We present an overlapping generations model...

This paper investigates whether the presence of financial frictions can help explain the differences in the variability of output and inflation between the Pre- and the Post-Volcker periods. I use a limited participation model with credit market imperfections, in which financial frictions may...

We construct and estimate a joint model of macroeconomic and yield curve dynamics. A small-scale backward/forward-looking rational expectations model describes the macroeconomy. Bond yields are affine functions of the state variables of the macromodel, and are derived assuming absence of...

The per capita growth rate of Chile from 1984 to 1997 was among the highest in the world. During recent years, however, per capita growth dropped significantly. This paper discusses the role of factor accumulation and the efficiency with which factors are used, measured as total factor...

This paper explores the link between an environmental policy and economic growth employing an extension of the Neoclassical Growth Model. We include a state equation to renewable natural resources, and consider natural resources as a component of the aggregate productivity. It is assumed that...