This paper presents the novel implications of introducing price rigidities into a model of good-specific habit formation, for the response of private consumption following a positive government spending shock. With 'deep' habits in demand, the price elasticity of demand rises after the fiscal...

In this paper, we characterize the relationship between the initial distribution of human capital and physical inheritances among individuals and the long-run distribution of these two variables. In a model with indivisible investment in education, we analyze how the initial distribution of...

Previous studies argue that, based on the New Keynesian framework, a fiscal stimulus financed by money creation has a strong positive effect on output under a reasonable degree of nominal price rigidities. This paper investigates the effects of an implementation lag in a money-financed fiscal...

This paper presents estimates of the effects that terms of trade volatility has on real GDP per capita growth. Based on 5-year non-overlapping panel data comprising 175 countries during 1980-2010, the paper finds that terms of trade volatility has significant adverse effects on economic growth...

How large are government spending and tax multipliers? The fiscal proxy- SVAR literature provides heterogenous estimates, depending on which proxies - fiscal or non-fiscal - are used to identify fiscal shocks. We reconcile the existing estimates via a flexible vector autoregressive model that...

The sending of remittances is a decentralised decision of migrant workers, nevertheless it has its macroeconomic implication in providing insurance against domestic output shocks in the recipient economies – a phenomenon known in literature as risk sharing. Using a large sample of 86...

Per capita carbon emissions are an important concept in international negotiations of climate policies and also in future projections of aggregate carbon emissions. This paper argues that the convergence studies on per capita carbon emissions in the literature are theoretically biased because...

We study the extent of global inflation synchronization using a dynamic factor model in a large set of countries over a half century. Our methodology allows us to account for differences across groups of countries (advanced economies and emerging market and developing economies) and to analyze...

I examine whether action-based fiscal consolidations are exogenous to contemporaneous GDP growth. Based on the narrative record, these fiscal consolidations had the primary objective to reduce a budget deficit. I find that temperature changes, the GDP growth rate of trading partners, and an...

Recent papers by Wagner in this journal and Vollebergh et al. in the Journal of Environmental Economics and Management point out some fundamental econometric problems with traditional methods of estimating the environmental Kuznets curve (EKC) and propose alternative approaches that avoid these...