In this paper we study the productivity slowdown taking as a starting point the nonlinear shape of the growth path. We relate the slowdown to the evolution of the world income distribution and show that i) in the periods before and after the oil shocks growth is nonlinear; ii) the productivity...

In a series of papers, Schelling presented a microeconomic model of neighbourhood segregation that he called a "spatial proximity model". The model specifies a spatial setup in which the individual agents care only about the composition of their own local neighbourhood. Agents belong to two...

We provide sufficient conditions and necessary conditions for stability of an economy under structural mixed recursive least squares/stochastic gradient heterogeneous learning of agents with possibly different degrees of inertia. We have found a unifying condition which is sufficient for...

In this paper we perform an in—depth investigation of relative merits of two adaptive learning algorithms with constant gain, Recursive Least Squares (RLS) and Stochastic Gradient (SG), using the Phelps model of monetary policy as a testing ground. The behavior of the two learning...

We use a continuous-time approximation approach to analyze dynamics of a model where government adaptively learns the Phillips curve while running monetary policy (Phellps problem). This approach is based on approximating the discrete-time dynamics with learning by a limiting continuous-time...

This paper studies the effect of imperfect information on aggregate output and price dynamics. I argue that imperfect information can lead monetary shocks to have persistent real effects. In the environment with unobserved aggregate (monetary) and real demand shocks, price-setting agents face...

We examine several named subsets of the wealthiest individuals in the US and the UK that are compiled by Forbes Magazine and Sunday Times. The data support conventional wisdom of a wealth distribution with power law-distributed right tail, and they allow us to calibrate a statistical equilibrium...

In this paper we ask whether policies targeting a reduction in crime rates through changes in education outcomes can be considered an effective and cost-viable alternative to interventions based on harsher punishment alone. In particular we study the effect of subsidizing high school completion....

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...

Long-range dependence in volatility is one of the most prominent examples of applications in financial market research involving universal power laws. Its characterization has recently spurred attempts at theoretical explanation of the underlying mechanism. This paper contributes to this recent...