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The Representative Consumer in the Neoclassical Growth Model with Idiosyncratic Shocks

Maliar, Lilia; Maliar, Serguei - In: Review of Economic Dynamics 6 (2003) 2, pp. 368-380

This paper studies a complete-market version of the neoclassical growth model, where agents face idiosyncratic shocks to eearnings. We show that if agents possess identical preferences of either the CRRA or the addilog type, then the heterogeneous-agent economy behaves as if there was a...

Persistent link: https://www.econbiz.de/10005069707

A Decade Lost and Found: Mexico and Chile in the 1980s

Bergoeing, Raphael; Kehoe, Patrick J.; Kehoe, Timothy J.; … - In: Review of Economic Dynamics 5 (2002) 1, pp. 166-205

Chile and Mexico exoperienced severe economic crises in the early 1980s. This paper analyzes four possible explanations … for why Chile recovered much faster than did Mexico. Comparing data from the two countries allows us to rule out a … growth accounting, a calibrated growth model, and economic theory, we conclude that the crucial difference between the two …

Persistent link: https://www.econbiz.de/10005091031

Nominal Wage Contracts, Labor Adjustment Costs and the Business Cycle

Janko, Zuzana - In: Review of Economic Dynamics 11 (2008) 2, pp. 434-448

Previous work of monetary dynamic stochastic general equilibrium models with nominal rigidity a la Taylor, particularly the Cho-Cooley model, was abandoned in favor of the New-Keynesian analysis due to the model's failure to deliver business cycle statistics that match the U.S. economy along...

Persistent link: https://www.econbiz.de/10004970379

Business Cycle Uncertainty and Economic Welfare

Cho, Jang-Ok; Cooley, Thomas; Kim, Hyung Seok - In: Review of Economic Dynamics 18 (2015) 2, pp. 185-200

We study the welfare implications of uncertainty in business cycle models. In the modern business cycle literature, multiplicative real shocks to production and/or preferences play an important role as the impulses that produce aggregate fluctuations. Introducing shocks in this way has the...

Persistent link: https://www.econbiz.de/10011268098

Informal Employment and Business Cycles in Emerging Economies: The Case of Mexico

Fernandez, Andres; Meza, Felipe - In: Review of Economic Dynamics 18 (2015) 2, pp. 381-405

We document how informal employment in Mexico is countercyclical, lags the cycle and is negatively correlated to formal … employment. This contributes to explaining why total employment in Mexico displays low cyclicality and variability over the … business cycle when compared to Canada, a developed economy with a much smaller share of informal employment. To account for …

Persistent link: https://www.econbiz.de/10011268100

Delivering Endogenous Inertia in Prices and Output

Johri, Alok - In: Review of Economic Dynamics 12 (2009) 4, pp. 736-754

This paper presents a DGE model in which aggregate price level inertia is generated endogenously by the optimizing behaviour of price-setting firms. All the usual sources of inertia are absent here ie., all firms are simultaneously free to change their price once every period and face no...

Persistent link: https://www.econbiz.de/10004985615

Productivity, Energy Prices and the Great Moderation: A New Link

Dhawan, Rajeev; Jeske, Karsten; Silos, Pedro - In: Review of Economic Dynamics 13 (2010) 3, pp. 715-724

We build upon recent research that attributes the moderation of output volatility since the 1980s to the reduced volatility of the Total Factor Productivity (TFP) by investigating the linkage between energy price fluctuations and the stochastic process for TFP. First, we estimate a joint...

Persistent link: https://www.econbiz.de/10005009769

Inflation and Output Dynamics in a Model with Labor Market Search and Capital Accumulation

Heer, Burkhard; Maussner, Alfred - In: Review of Economic Dynamics 13 (2010) 3, pp. 654-686

In a sticky-price model with labor market search and habit persistence, Walsh (2005) shows that inertia in the interest rate policy helps to reconcile the inflation and output persistence with empirical observations for the US economy. We show that this finding is sensitive with regard to the...

Persistent link: https://www.econbiz.de/10005009773

Active and Passive Monetary Policy in an Overlapping Generations Model

Sorger, Gerhard - In: Review of Economic Dynamics 8 (2005) 3, pp. 731-748

In a standard overlapping generations model, active monetary policy reinforces mechanisms that lead to equilibrium indeterminacy and to countercyclical behavior of young-age consumption. The policy rule which minimizes inflation volatility can be active or passive, depending on the...

Persistent link: https://www.econbiz.de/10005090942

Hiring as Investment Behavior

Yashiv, Eran - In: Review of Economic Dynamics 3 (2000) 3, pp. 486-522

This paper explores the determinants of hiring at the macroeconomic level It treats the hiring decision as an investment decision, similar to the one taken for physical capital or for financial assets. At its core is a present value relation which defines the worker's "asset value" for the firm...

Persistent link: https://www.econbiz.de/10005091010