This paper surveys the theoretical and empirical literature on the macroeconomic implications of financial imperfections. It focuses on two major channels through which financial imperfections can affect macroeconomic outcomes. The first channel, which operates through the demand side of finance...

We reexamine the issue of executive compensation within a gen-eral equilibrium production context. Intertemporal optimality placesstrong restrictions on the form of a representative manager's compen-sation contract, restrictions that appear to be incompatible with thefact that the bulk of many...

In the present paper, time series on industrial production growth of individual countries are used to investigate the following questions: (i) Is there a common growth cycle for the euro area countries? (ii) Did the synchronization change over time? (iii) Can we discriminate between a "European"...

This paper investigates the business cycle implications of limited pass-through to retail interest rates based on a calibrated sticky price model. Although limited interest rate pass-through can in principle reduce output and inflation volatility at the same time, large reductions in output...

This paper analyses the comovement of the German and Austrian economies and the transmission of German shocks to Austria. Static and dynamic correlation measures show a strong comovement and a change of the relative position in time of these two economies. The transmission of German shocks to...

The outcome of the referendum on the UK's membership of the European Union in June 2016 was largely unanticipated by politicians and pundits alike. Even after the "Leave" vote, the uncertainty surrounding the withdrawal process might have affected the UK economy. We draw on an official list of...

The Hodrick-Prescott filter is a popular tool in macroeconomics for decomposing a time series into a smooth trend and a business cycle component. The last few years have witnessed global events, such as the Global Financial Crisis, the COVID-19 pandemic, and the war in Ukraine, that have had...

Serious life events, such as the loss or the onset of a chronic condition may influence cognitive functioning. We examine whether the cognitive impact of such events is stronger if conditions very early in life were adverse, using Dutch lnogitudinal data of older persons. We exploit exogenous...

Previous studies on financial frictions have been unable to establish the empirical significance of credit constraints in macroeconomic fluctuations. This paper argues that the muted impact of credit constraints stems from the absence of a mechanism to explain the observed persistent comovements...

The purpose of this paper is to explore the microfoundations of the observed asymmetric movement in aggregate unemployment rates. Using U.S. data, we find that individual labor force participation responds asymmetrically to changes in local labor market conditions, consistent with the pattern of...