The empirical literature studying the effects of fiscal policy shocks using VAR models differs among two important dimensions: the identification scheme and the VAR specification. Not surprisingly the results obtained are often diverse. The aim of this paper is to test whether differences in the...

The inability of a wide array of dynamic stochastic general equilibrium (DSGE) models to generate fluctuations that resemble actual business cycles has lead to the use of habit formation in consumption. For example, habit formation has been shown to help explain the negative response of labour...

We study a dynamic general equilibrium model with production, in which a representative agent chooses an unobservable effort level. We cast the problem as a continuous time principal agent model. We study the problem of a central planner (the principal) choosing optimal allocations of...

We examine the long-run output-inflation trade-off under the assumption that firms face menu costs and set prices in a state dependent fashion. We argue that these characteristics capture the idea that the long-run output-inflation trade-off is driven by (predictable) trend inflation, and the...

This paper examines theoretically, using a two-country real-business-cycle model, the effects of capital-market liberalization when there is limited participation in national financial markets. It is assumed that workers cannot smooth consumption as well as do stockholders, and therefore,...

An agent-based Keynesian laboratory is built with a twofold purpose; to further investigate the ideas of Keynes and check them for internal consistency, and secondly to investigate the stability of a Keynesian world and explore the scope for economic policy. The laboratory is developed in Swarm...

This paper presents a model of a monetary production economy with non-Walrasian good, labor and money markets. In the non-Walrasian approach, transactions occur at non clearing prices and agents's demand and supply are affected by quantity constraints in the opposite side of the market. The...

Using a simple stochastic multi-sector model we show patterns of demand shares on sectors with different productivity coefficients have some expected and some unexpected effects on GDP, sector sizes, the magnitudes of the Okun's law coefficients, and Beveridge curves shifts. The basic stochastic...

The Circuitists are a largely European school of economic thought that argue that a monetary economy is fundamentally different to a barter system, and that therefore money cannot be simply modelled as the n+1th good in a Walrasian general equilibrium system. However, while the School has made...

Following a conjecture of Kozicki and Tinsley we generalises the habit formation model of consumption to allow for both a multiplicative utility function and a habit\aspiration function which is a geometrically weighted average of past consumption. The geometric form of the aspiration function...