A leading explanation of aggregate stock market behavior suggests that assets are priced as if there were a representative investor whose utility is a power function of the difference between aggregate consumption and a "habit" level, where the habit is some function of lagged and (possibly)...

In this paper we use optimal-instrument and new finite-sample methods to test the empirical relevance of the New Keynesian Phillips curve (NKPC) equation. Unlike generalized method of moments-based methods, these generalized Anderson-Rubin tests are immune to the presence of weak instruments,...

This paper develops and estimates a search model in which career-specific and firm-specific matches determine job mobility and wage growth. Each worker-firm and worker-career relationship is characterized by a match that evolves stochastically over time. At each period, a worker has three...

This paper investigates whether the financial markets are relatively more efficient than banks in the UK than in continental Europe. The UK channels a larger fraction of the financial flow to the firms through financial markets than continental Europe but this is explained by larger firms in the...

There exists significant dispersion in output prices between firms in many industries. As a consequence the value of output is not necessarily a good measure of the quantity of output. Estimation of production functions for these types of goods is thus challenging if quantities and prices of...

We develop a modeling framework to examine household labor supply decisions that includes the husbandÂ’s and wifeÂ’s choice of whether to behave cooperatively. Our model is static and, as opposed to most applications of cooperative models to household labor supply decisions, allows for...

This paper estimates a life cycle model of labor supply, retirement and savings behavior in which future health status and wages are uncertain. Individuals face a fixed cost of work and cannot borrow against future labor, pension, or Social Security income. The method of simulated moments is...