This paper studies the dynamic properties of a standard cash-in-advance model modified to include habit persistence over preferences. The central bank is assumed to follow an exogenous money growth rule. We show that equilibrium real indeterminacy is more likely to occur when habit persistence...

This article investigates the effects of a permanent technology shock on labor input in the major seven developed countries. The recent empirical literature which uses Structural Vector Autoregressions (SVAR) with long-run restrictions has argued that technology shocks lead to a persistent and...

Structural Vector Autoregressions with a differenced specification of hours (DSVAR) suggest that productivity shocks identified using long--run restrictions lead to a persistent and significant decline in hours worked. This evidence calls into question standard business cycle models in which a...

We extend the benchmark real business cycle model amending technology for fair wage considerations. Effort depends on current, alternative and past wages. Past wages are treated as the worker's past wages (personal norm) or as the past wages of the society (social norm). This last model...