Bullard, James; Suda, Jacek; Singh, Aarti; Azariadis, Costas - Society for Economic Dynamics - SED - 2014
We study a theory in which households borrow during the first half of a 241-period life cycle as part of a DSGE. Households confront a persistent regime-switching process on aggregate labor productivity growth. When the economy switches to the high growth regime, there is more borrowing based on...