The goal of this paper is to develop and calibrate a quantitative general equilibrium model to account for the joint evolution of educational attainment and relative wages among education groups in the U.S. over the 20th century. The key exogenous explanatory variables we consider are...

We amend Hopenhayn's model of equilibrium industry dynamics by explicitly modeling the firm's investment choice and by introducing aggregate fluctuations. Our main goal is to study the model's implications for the cyclical behavior of entry, exit, and the cross--section of operating firms. We...

This paper investigates whether the secular process of Structural Change - i.e. the broad shift away from manufacturing and towards services during the post war period - can simultaneously account for the Great Moderation and provide a mechanism for its unraveling. Based on detailed US sectoral...

value exists and displays more severely in smaller samples.

This paper sets up and computes a stochastic neoclassical growth model where agents face uninsurable idiosyncratic labor income risk and heterogenous discount factors. Households value government purchases which are financed by income taxes. The government cannot commit to future streams of...

much.

of the noise distribution, utility function and reservation utility.

There are two stark views of the forces driving aggregate real exchange rates in the short-run. One view is that all of the variance is accounted for by non-traded items in the CPI basket (the classical dichotomy view), the other, due to Engel (1999), claims the opposite, with all of the...

Instead, I present and test a model where bilateral trade liberalization induces the most productive firms (exporters) to adopt skill-biased new technologies. I test the model in the context of a regional free trade agreement, MERCOSUR. I find that the increase in the relative demand of skilled...

positions that require small reallocations. In such circumstances, welfare can increase if the government steps in, purchases private assets on its own account, and resells them when the economy recovers.