This paper develops a public education scheme that takes uncertainty aspects of private educational investments explicitly into account. In the author’s framework, the social merits of public education schemes are related to the lack of markets in which students can insure against educational...

This paper examines the extent to which conclusions of cross-country studies of private savings are robust to allowing for the possible heterogeneity of savings behavior across countries and the inclusion of dynamics. It shows that neglecting heterogeneity and dynamics can lead to misleading...

"This paper shows that economic fluctuations can be largely demand-driven. In particular, the stylized open-economy business cycle regularities documented by Feldstein and Horioka (1980) and Backus, Kehoe and Kydland (JPE 1992) can be explained by the standard general equilibrium theory if...

"This paper investigates the behavior of short-term real and nominal rates of interest by combining consumption-based and production-based models into a single general equilibrium framework. Based on the theoretical nonlinear relationships that link interest rates to both the marginal rates of...