While many empirical economists claim that energy price shocks drive U.S. business cycles, economists using dynamic stochastic general equilibrium (DSGE) models believe that business cycles are caused mainly by productivity shocks. ; The authors reconcile the two views by constructing a DSGE...

Most stock market investors believe that the ideal equity portfolio should be well diversified to lower overall portfolio risk. International financial markets offer a means for diversification, but most investors do not exploit this risk-sharing opportunity and instead hold large shares of...

The housing sector’s important role in the U.S. economy is hard to miss: Real estate held in household portfolios in 2004 was worth $17 trillion, and the mortgage market now totals more than $7.5 trillion. ; To understand how this sector and related government policies affect households and...

The U.S. Social Security Trust Fund faces depletion over the coming decades, and there is a near consensus that social security reform is necessary. Under one suggestion for partial privatization, current surpluses would fund private, individual retirement accounts, and the private savings would...