In this paper we use optimal-instrument and new finite-sample methods to test the empirical relevance of the New Keynesian Phillips curve (NKPC) equation. Unlike generalized method of moments-based methods, these generalized Anderson-Rubin tests are immune to the presence of weak instruments,...

We investigate the extent to which firm-level data are consistent with the microeconomic foundations of the benchmark financial accelerator model of Bernanke, Gertler, and Gilchrist (1999). To that purpose, we construct a new dataset that directly links firm-specific balance sheet variables to...

Empirical studies of economic growth across countries are abundant and rich in conclusions, some of them widely accepted. This is not the case, however, with the empirics of business cycles. Particularly, there exists little evidence explaining why some countries take more time than others...

The purpose of this paper is to examine whether the stock wealth effect of consumption exhibits structural change(s) or behaves asymmetrically over business cycles. We first perform a general test of linearity for the behavior of aggregate consumption in response to changes in stock wealth based...

This paper analyzes the implications of heterogeneity in price setting for both price and inflation inertia. Standard models based on Taylor- or Calvo-style price setting usually assume ex-ante identical firms, while Calvo's approach implies only ex-post heterogeneity. While it is known that...

In this paper a public bureau can extract surplus value from the services it provides not only by misrepresenting its production costs to its oversight committee but also by influencing the perceptions of the legislative body such as the parliament or the congress and the public at large by...

This paper presents a participation game experiment to study the impact of uncertainty and costly political participation on the incidence of reform. Fernandez and Rodrik (1991) show that uncertainty about who will ultimately gain or lose as a result of a reform can prevent its adoption. We...

Recent terrorist attacks such as the attacks on the World Trade Centre in September 2001 have generated new interest in the debate on capital punishment. It has been suggested that support for the death penalty could be higher in the wake of terrorist activity. Using data from the Australian...

We offer a simple general equilibrium model to analyze how economy-wide forces (i.e. shocks to terms of trade, technology and endowments) will affect the intensity of social conflict over the distribution of resources. Examples of conflict activities range from crime to civil war. We show that...

In this paper we model the interaction between parties and candidates to highlight the mechanisms by which parties selecting candidates may discipline legislators. Parties are long-lived institutions providing incentives to short-lived candidates. Citizens have preferences over a multimentional...