The conditional equity premium in the model with production is often approximated by assuming a jointly log-normal distribution of the marginal rate of substitution in consumption and the marginal productivity of capital. We show that, for standard parameterization, this premium is about...

Welfare gains of optimal cyclical fiscal policies as computed from previous dynamic general equilibrium models seem to be small and generally do not exceed 1% of total consumption if preferences are described by a standard isoelastic utility function. It is demonstrated that the assumption of...

We find that inflation does not unanimously decrease savings in the US during the postwar period. This result is puzzling as it contradicts the implications of most monetary general equilibrium models.