We study how the use of judgment or "add-factors" in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We examine the possibility of a new phenomenon, which we call exuberance equilibria, in the New Keynesian monetary policy...

We present the first causal estimates of the effect of Social Security Disability Insurance benefit receipt on labor supply using all program applicants. We use administrative data to match applications to disability examiners and exploit variation in examiners' allowance rates as an instrument...

Elderly individuals exhibit wide disparities in their sources of income. For those in the bottom half of the income distribution, Social Security is the most important source of support; program changes would directly affect their well-being. Income from private pensions, assets, and earnings...

Using a local randomized experiment that arises from a sharp discontinuity in Disability Insurance (DI) policy in Norway, we provide transparent and credible identification of how financial incentives induce DI recipients to return to work. We find that many DI recipients have considerable...

The aging of the US population undoubtedly will be associated with macroeconomic changes. In particular, some combination of lower consumption growth and increased labor input will ultimately be required. But, the timing of these changes can have important effects on variables like the rate of...

Mortality gradients by education and income have been rising in the United States and elsewhere. However, their impact on Social Security progressivity has received relatively little attention, and the impact on Medicare has received effectively none. This paper uses the Future Elderly Model to...