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Permanent and Transitory Components in Macroeconomic Fluctuations

Campbell, John Y.; Mankiw, N. Gregory - 2021

Fluctuations in real GNP have traditionally been viewed as transitory deviations from a deterministic time trend. The purpose of this paper is to review some of the recent developments that have led to a new view of output fluctuations and then to provide some additional evidence. Using post-war...

Persistent link: https://www.econbiz.de/10013312506

Sticky Information in General Equilibrium

Mankiw, N. Gregory - 2007

This paper develops and analyzes a general-equilibrium model with sticky information. The only rigidity in goods, labor, and financial markets is that agents are inattentive, sporadically updating their information sets, when setting prices, wages, and consumption. After presenting the...

Persistent link: https://www.econbiz.de/10012778241

Consumption, Income, and Interest Rates : Reinterpreting the Time Series Evidence

Campbell, John Y.; Mankiw, N. Gregory - 2021

This paper proposes that the time-series data on consumption, income, and interest rates are best viewed as generated not by a single representative consumer but by two groups of consumers. Half the consumers are forward-looking and consume their permanent income, but are extremely reluctant to...

Persistent link: https://www.econbiz.de/10013221500

Are Output Fluctuations Transitory?

Campbell, John Y.; Mankiw, N. Gregory - 2021

According to the conventional view of the business cycle, fluctuations in output represent temporary deviations from trend. The purpose of this paper is to question this conventional view. If fluctuations in output are dominated by temporary deviations from the natural rate of output, then an...

Persistent link: https://www.econbiz.de/10013211684

Risk and Return : Consumption Versus Market Beta

Mankiw, N. Gregory - 2008

The interaction between the macroeconomy and asset markets is central to a variety of modern theories of the business cycle. Much recentwork emphasizes the joint nature of the consumption decision and the portfolio allocation decision. In this paper, we compare two formulations of the Capital...

Persistent link: https://www.econbiz.de/10012774649

Stock Market Yields and the Pricing of Municipal Bonds

Mankiw, N. Gregory - 2008

This paper proposes an alternative to the traditional model for explaining the spread between taxable and tax-exempt bond yields. This alternative model is a special case of a general class of clientele models of portfolio choice and asset market equilibrium. In particular, we consider a setting...

Persistent link: https://www.econbiz.de/10012774978

Intertemporal Substitution in Macroeconomics

Mankiw, N. Gregory - 2011

Modern neoclassical theories of the business cycle posit that aggregate fluctuations in consumption and employment are the consequence of dynamic optimizing behavior by economic agents who face no quantity constraint. In this paper, we estimate an explicit model :f this type. In particular, we...

Persistent link: https://www.econbiz.de/10013132070

The Optimal Taxation of Height : A Case Study of Utilitarian Income Redistribution

Mankiw, N. Gregory - 2011

Should the income tax include a credit for short taxpayers and a surcharge for tall ones? The standard Utilitarian framework for tax analysis answers this question in the affirmative. Moreover, a plausible parameterization using data on height and wages implies a substantial height tax: a tall...

Persistent link: https://www.econbiz.de/10013134658

An Exploration of Optimal Stabilization Policy

Mankiw, N. Gregory - 2011

This paper examines the optimal response of monetary and fiscal policy to a decline in aggregate demand. The theoretical framework is a two-period general equilibrium model in which prices are sticky in the short run and flexible in the long run. Policy is evaluated by how well it raises the...

Persistent link: https://www.econbiz.de/10013124860

Optimal Taxation in Theory and Practice

Mankiw, N. Gregory - 2010

We highlight and explain eight lessons from optimal tax theory and compare them to the last few decades of OECD tax … policy. As recommended by theory, top marginal income tax rates have declined, marginal income tax schedules have flattened … theory. Moreover, some of theory's more subtle prescriptions, such as taxes that involve personal characteristics, asset …

Persistent link: https://www.econbiz.de/10013152503