Standard international real business cycle models are generally unable to replicate the observed comovements of all the main aggregate variables: in particular, they generate low or negative international comovements in output, investment, and labour. I simulated a two-country, two-sector...

We attempt to explain the overreaction of asset prices to movements in short-term interest rates, dividends, and asset supplies. The key element of our explanation is a margin constraint that traders face which limits their leverage to a fraction of the value of their assets. Traders may lever...

This paper makes three contributions: First, I construct annual time series of gross domestic investment and national saving in the U.S. for the 1897–1949 period using historical component series. I compare the qualitative and quantitative properties of the newly constructed series with the...

Empirical studies quantifying the economic effects of increased foreign direct investment (FDI) have not provided conclusive evidence that they are positive, as theory predicts. This paper shows that the lack of empirical evidence is consistent with theory if countries are in transition to FDI...

A dynamic general equilibrium model is constructed to examine the impact of mass immigration on capital accumulation in life-cycle economies. The model is calibrated to match Canadian demographic characteristics over 1861-1913. This was a period when Canada experienced a dramatic shift in...

This paper makes three contributions: First, I construct annual time series of gross domestic investment and national saving in the U.S. for the 1897-1949 period using historical component series. I compare the qualitative and quantitative properties of the newly constructed series with the...

This paper studies an urban growth model where learning through personal contacts could be more effective in a denser locale, whereas the effectiveness of learning through impersonal means of communications depends principally on the technology of communications rather than on the locale in...

Credit supply and demand changes are mostly unobserved, thus identifying completely the transmission of monetary policy through the credit channel is unfeasible. Bank lending surveys by central banks, however, contain reliable quarterly information on changes in loan conditions due to bank, firm...

This paper studies corporate debt structure over the business cycle and its implications for aggregate macroeconomic dynamics. We develop a tractable macro-finance model featuring debt heterogeneity with both secured and unsecured debt. Unlike secured debt, unsecured debt gives the lenders no...

Investment booms and asset "bubbles" are often the consequence of heavily leveraged borrowing and speculations of persistent growth in asset demand. We show theoretically that dynamic interactions between elastic credit supply (due to leveraged borrowing) and persistent credit demand (due to...