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Government Economic Policy, Sentiments, and Consumption
Mian, Atif - 2015
during the Great Recession had as large an effect on consumption as the negative shock to household net worth coming from the …
Persistent link: https://www.econbiz.de/10012457351
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Financial Market Imperfections and Business Cycles
Greenwald, Bruce C. - 1988
This paper develops a simple model of macroeconomic behavior which incorporates the impact of financial market "imperfections," such as those generated by asymmetric information in financial markets. These information asymmetries may lead to breakdowns in markets, like that for equity, in which...
Persistent link: https://www.econbiz.de/10012476573
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Reviving the Limit Cycle View of Macroeconomic Fluctuations
Beaudry, Paul - 2015
There is a long tradition in macroeconomics suggesting that market imperfections may explain why economies repeatedly go through periods of booms and busts, with booms sowing the seeds of the subsequent busts. This idea can be captured mathematically as a limit cycle. For several reasons, limit...
Persistent link: https://www.econbiz.de/10012457426
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The Cyclical Behavior of Equilibrium Unemployment and Vacancies : Evidence and Theory
Shimer, Robert - 2003
show that a shock that changes average labor productivity primarily alters the present value of wages, generating only a … small movement along a downward sloping Beveridge curve (unemployment-vacancy locus). A shock to the job destruction rate … generates a counterfactually positive correlation between unemployment and vacancies. In both cases, the shock is only slightly …
Persistent link: https://www.econbiz.de/10012469164
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Taxes, Debts, and Redistributions with Aggregate Shocks
Bhandari, Anmol - 2013
A planner sets a lump sum transfer and a linear tax on labor income in an economy with incomplete markets, heterogeneous agents, and aggregate shocks. The planner's concerns about redistribution impart a welfare cost to fluctuating transfers. The distribution of net asset holdings across agents...
Persistent link: https://www.econbiz.de/10012459192
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Are Cyclical Fluctuations in Productivity Due More to Supply Shocks or Demand Shocks?
Shapiro, Matthew D. - 1987
Measured productivity is strongly procyclical. Real business cycle theories suggest that actual fluctuations in productivity are the source of fluctuations in aggregate output. Keynesian theories maintain that fluctuations in aggregate output come from shocks to aggregate demand. Keynesian...
Persistent link: https://www.econbiz.de/10012476922
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Labor Supply and Aggregate Fluctuations
Hall, Robert E. - 1979
Issues of labor supply are at the heart of macroeconomic explanations of the large cyclical fluctuations of output observed in modern economies. This paper starts with a serious empirical examination of the view that the labor market is always in balance-that every observed combination of...
Persistent link: https://www.econbiz.de/10012478763
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Risk Premium Shocks Can Create Inefficient Recessions
Tella, Sebastian Di - 2020
We develop an equilibrium theory of business cycles driven by spikes in risk premiums that depress business demand for capital and labor. Aggregate shocks increase firms' uninsurable idiosyncratic risk and raise risk premiums. We show that risk shocks can create quantitatively realistic...
Persistent link: https://www.econbiz.de/10012479245
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Uncertainty Shocks and Business Cycle Research
Fernández-Villaverde, Jesús - 2020
We review the literature on uncertainty shocks and business cycle research. First, we motivate the study of uncertainty shocks by documenting the presence of time-variation in the volatility of macroeconomic time series. Second, we enumerate the mechanisms that researchers have postulated to...
Persistent link: https://www.econbiz.de/10012479292
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On the Sources of Aggregate Fluctuations in Emerging Economies
Chang, Roberto - 2010
Recent research on macroeconomic fluctuations in emerging economies has focused in two leading approaches: introducing a stochastic productivity trend, in addition to temporary productivity shocks; or allowing for foreign interest rate shocks coupled with financial frictions. This paper compares...
Persistent link: https://www.econbiz.de/10012462714