We investigate the roles of a time-varying inflation target and monetary and fiscal policy stances on the dynamics of inflation in a DSGE model. Under an active monetary and passive fiscal policy regime, inflation closely follows the path of the inflation target and a stronger reaction of...

While the asset price collapse of the late 80s in Japan might explain the disinflationary pressures that followed, it is hard to attribute the persistent deflation that the country has faced since the mid 90s to that initial shock. We argue that a failure to account for demographic trends when...

The standard argument for abstracting from capital accumulation in sticky-price macro models is based on their short-run focus: over this horizon, capital does not move much. This argument is more problematic in the context of real exchange rate (RER) dynamics, which are very persistent. In this...

We develop a tractable unified framework for solving optimal time- and state-dependent price-setting problems. We illustrate our approach by solving a price-setting problem where adjustments are costly, and there are two types of information. One type is freely and continuously available while...

We use an identified factor-augmented vector autoregression (FAVAR) to estimate the impact of monetary policy shocks on the cross-section of stock returns. Our FAVAR combines unobserved factors extracted from a large set of financial and macroeconomic indicators with the Federal Funds rate. We...

We use novel high-frequency panel data on individuals' job applications from an online job posting engine to study (1) whether at the beginning of search job seekers with different levels of education apply to different jobs, and (2) how search behavior changes as search continues. First, we...

This paper studies the extent to which frictions in financial markets affect aggregate trade flows. I study a model of firm dynamics with financial frictions and international trade, calibrated to match key features of firm-level data. I find that, while financial frictions have a large effect...

Our analysis offers a different rationale for the failure of the Atkinson-Stiglitz theorem than that of Naito (1999). Moreover, our results are in sharp contrast to those of Saez (2004) and Scheuer (2012), who considers an occupational choice model where workers have heterogeneous idiosyncratic...

This paper examines the role of the market for high-skilled labor in explaining variation in the levels and dynamics of the service share, home production time, and market labor across countries. We establish and extend key facts for a cross-section of countries. First, growth in the total share...

We document five facts about price dispersion.