This paper shows that there are striking implications that stem from including durable goods in otherwise conventional sticky price models. The behavior of these models depends heavily on whether durable goods are present and whether these goods have sticky prices. If long-lived durables have...

We use CEX repeated cross-section data on consumption and income, to evaluate the nature of increased income inequality in the 1980s and 90s. We decompose unexpected changes in family income into transitory and permanent, and idiosyncratic and aggregate components, and estimate the contribution...

I explore the dynamics in overlapping generations models with pure exchange and lump-sum taxes, when the second period after tax endowment is negative, and contrast the characteristics of equilibria to those of models with positive after tax endowments. In particular, if the intertemporal...

This paper examines a particular aspect of entrepreneurship, namely firms' ability to respond appropriately to unexpected changes in the environment (i.e., their adaptability). An increase in firms' adaptability improves allocative efficiency in a competitive economy, but can reduce it when...

In this paper we consider different explanations for why the coefficient associated with human capital is often negative in growth regressions once country-specific effects are controlled for, whereas the coefficient in question is strongly positive in cross-sectional or panel results based on...

We calibrate an infinite-horizon model with endogenous growth and unemployment on actual data from the largest countries in the European Union. Two types of balanced-budget fiscal policy experiments are studied. First, the effects of separately changing the tax rates on capital, labor and...

The paper analyzes the convergence dynamics of a log-linearized open- economy neoclassical growth model under the assumptions of large adjustment costs for human capital investment, moderate adjustment costs for physical capital investment, and perfect capital mobility. The model can be...

Este documento analiza el impacto de un shock en la tasa de interés externa en la economía chilena. Con este fin, se estima un modelo empírico de Vectores Autoregresivos y adicionalmente se desarrolla un modelo estocástico de equilibrio general calibrado y parametrizado para la economía...

This paper explores the consequences of rising returns to human capital investment on the personal savings rate. Over the past two decades, the return to college education has increased relative to high school education leading economists to argue the presence of 'skill biased technological...

This paper examines whether terms of trade shocks have an asymmetric effect on private savings in transition economies. A simple three-period framework is developed to show that, in the presence of binding credit constraints in bad states of nature, savings rates can be sensitive to favorable...