Asset market bubbles and crashes are a major source of economic instability and inefficiency. Sometimes ascribed to animal spirits or irrational exuberance, their source remains imperfectly understood. Experimental methods can isolate systematic deviations from an asset's fundamental value in a...

By using a nonlinear VAR model, we investigate whether the response of the US stock and housing markets to uncertainty shocks depends on financial conditions. Our model allows us to change the response of the US financial markets to volatility shocks in periods of normal and financial distress....

The standard model of intertemporal choice assumes risk neutrality toward the length of life: due to additivity, agents are not sensitive to a mean preserving spread in the length of life. Using a survey fielded in the RAND American Life Panel (ALP), this paper provides empirical evidence on...

This paper shows that job mobility is a valuable channel which employed workers use to mitigate bad labor market shocks. I construct and estimate a model of wage dynamics jointly with a dynamic model of job mobility. The key feature of the model is the specification of wage shocks at the worker-...

I address the causes of the gender wage gap with a new dynamic model of wage, hours, and job changes that permits me to decompose the gap into a portion due to gender differences in preferences for hours of work and in constraints. The dynamic model allows the differences in constraints to...

We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is...

We investigate the importance of various mechanisms by which child care policies can affect life-cycle patterns of employment and fertility among women, as well as long-run cognitive outcomes among children. A structural life-cycle model of employment, fertility, and child care use is estimated...

We show that the size of collateralized household debt determines an economy's vulnerability to crises of confidence. The house price feeds back on itself by contributing to a liquidity effect, which operates through the value of housing in a collateral constraint. Over a specific range of debt...

We study how unemployment effects the over-indebtedness of households using the new European Household Finance and Consumption Survey (HFCS). First, we assess the role of different labor market statuses (i.e. employed, unemployed, disabled, retired, etc.) and other household characteristics...

This paper reviews the recent literature on the production of skills of young persons. The literature features the multiplicity of skills that explain success in a variety of life outcomes. Noncognitive skills play a fundamental role in successful lives. The dynamics of skill formation reveal...