We document that at business cycle frequency, nominal variables, such as aggregate price levels and nominal interest rates, are more correlated across countries than real output. Since national central banks control the domestic money supply and their objective has been to keep the nominal...

The U.S. economy isn't recovering from the deep Great Recession of 2008-2009 with the anticipated strength. A widespread conjecture is that this weakness can be traced to perceptions of an imminent switch to a higher taxes regime. The paper explores quantitatively this fiscal sentiment...

We investigate a two-country model of real business cycles along the lines of Backus, Kehoe, and Kydland (1992) with one new feature: country one residents are ambiguous [along the lines of Epstein (2001)] about the productivity shocks of country two and vice versa. The model is calibrated and...

This paper takes a slightly different approach and uses data from labor market flows to evaluate labor market dynamics during the time period in which unemployment benefits were extended by statute, July 2008 to May 2012. To do so, we develop a simple search model to study labor market dynamics....

Property crime is today more widespread in Europe than in the United States, while the opposite was true during the 1970s and 1980s. In this paper we study the determinants of crime in a dynamic general equilibrium model with uninsured idiosyncratic shocks. We focus on Germany, and compute the...

This paper consists of two parts. In the first part we use the PSID (which is now long enough to allow the observation of the entire working life) to document empirical life cycle profiles (wage, earnings, hours) of a cohort of workers followed from when they enter the labor market in 1967 to...

We then consider a model that extends Cardia and Ng (2006) analysis of grandparenting and rationalizes this evidence with standard preferences and working-age grandparents. The key idea is that individuals value a particular good, "time spent with family children". This good can be "produced"...

We study general equilibrium with nonconvexities. In these economies there exist sunspot equilibria without the usual assumptions needed in convex economies, and they have good welfare properties. Moreover, in these equilibria, agents act as if they have quasi-linear utility. Hence wealth...

Real business cycle models have difficulty replicating the volatility of S&P 500 returns. This fact should not be surprising since the RBC theory suggests a measurement of the return of aggregate capital, not stock market returns. We construct a quarterly time series of the after-tax return to...