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Human Capital Risk, Contract Enforcement, and the Macroeconomy
Krebs, Tom; Kuhn, Moritz; Wright, Mark L. J. - Federal Reserve Bank of Chicago - 2014
households with children are under-insured against the risk that an adult member of the household dies. We develop a tractable … macroeconomic model with human capital risk, age-dependent returns to human capital investment, and endogenous borrowing constraints … capital risk. A calibrated version of the model can quantitatively account for the life-cycle variation of life …
Persistent link: https://www.econbiz.de/10011093784
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The dynamics of work and debt
Campbell, Jeffrey R. (contributor);  … - 2004 - [Elektronische Ressource]
"This paper characterizes the labor supply and borrowing of a household facing collateral requirements that limit its … debt and compel it to accumulate equity in its durable goods stock. The household's discount rate exceeds the market rate … constraints generate a positive comovement between the household's debt, the stock of durable goods and labor supply following …
Persistent link: https://www.econbiz.de/10001952270
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The cost of business cycles under endogenous growth
Barlevy, Gadi (contributor) - 2003 - [Elektronische Ressource]
"In his famous 1987 monograph, Robert Lucas argued that further stabilizing the business cycles that persisted in the post-War era was pointless, because these cycles had a negligible effect on societal well- being. In particular, Lucas demonstrated that society should be willing to pay only a...
Persistent link: https://www.econbiz.de/10001915579
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The pitfalls in inferring risk from financial market data
Bliss, Robert R. (contributor) - 2000 - [Elektronische Ressource]
Persistent link: https://www.econbiz.de/10001658371
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Measuring productivity growth in Asia : do market imperfections matter?
Fernald, John G. (contributor); Neiman, Brent (contributor) - 2003 - [Elektronische Ressource]
"Recent research reports contradictory estimates of productivity growth for the newly industrialized economies (NIEs) of Asia. In particular, estimates using real factor prices find relatively rapid TFP growth; estimates using quantities of inputs and output find relatively low TFP growth. The...
Persistent link: https://www.econbiz.de/10001920609
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Adverse Selection, Risk Sharing and Business Cycles
Veracierto, Marcelo - Federal Reserve Bank of Chicago - 2014
I consider a real business cycle model in which agents have private information about an idiosyncratic shock to their value of leisure. I consider the mechanism design problem for this economy and describe a computational method to solve it. This is an important contribution of the paper since...
Persistent link: https://www.econbiz.de/10011093788
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Human Capital and Long-Run Labor Income Risk
Benzoni, Luca; Chyruk, Olena - Federal Reserve Bank of Chicago - 2013
This review article examines the role of labor income risk in determining the value of a person’s human capital. We … to assess the value and risk of pension promises. Finally, we discuss how to enrich the environment with heterogeneity in …
Persistent link: https://www.econbiz.de/10010735414
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Bubbles and Leverage: A Simple and Unified Approach
Bogusz, Theodore; Bogusz, Theodore - Federal Reserve Bank of Chicago - 2013
In this paper, we lay out a simple framework that captures much of what the theoretical literature has to say about the role of credit in systemically important asset booms and busts. In addition, we suggest ways in which to incorporate physical investment in the bubble asset as well as monetary...
Persistent link: https://www.econbiz.de/10010735415
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Cash-in-the-Market Pricing in a Model with Money and Over-the-Counter Financial Markets
Mattesini, Fabrizio; Nosal, Ed - Federal Reserve Bank of Chicago - 2011
Entrepreneurs need cash to finance their real investments. Since cash is costly to hold, entrepreneurs will underinvest. If entrepreneurs can access financial markets prior to learning about an investment opportunity, they can sell some of their less liquid assets for cash and, as a result,...
Persistent link: https://www.econbiz.de/10010735677
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The Scarcity Value of Treasury Collateral: Repo Market Effects of Security-Specific Supply and Demand Factors
D'Amico, Stefania; Fan, Roger; Kitzul, Yuriy - Federal Reserve Bank of Chicago - 2013
In the repo market, forward agreements are security-specific (i.e., there are no deliverable substitutes), which makes it an ideal place to measure the value of fluctuations in a security's available supply. In this study, we quantify the scarcity value of Treasury collateral by estimating the...
Persistent link: https://www.econbiz.de/10010735678