unobserved vehicle and consumer characteristics by using within model-year changes in the price of gasoline and vehicle sales. We …This paper uses a unique data set of monthly new vehicle sales by detailed model from 1978- 2007, and implements a new … identification strategy to estimate the effect of the price of gasoline on consumer demand for fuel economy. We control for …

The 1987 market crash was associated with a dramatic and permanent steepening of the implied volatility curve for … the updating of agents' beliefs about the likelihood of future jumps, which produces a market crash and a permanent shift … in option prices. Consumption and dividends remain smooth, and the model is consistent with salient features of …