This paper assesses the bank-lending channel interpretation of evidence on the heterogeneous response of firms to monetary shocks. To do so I develop a quantitative general equilibrium model of the bank-lending channel with imperfect credit markets. The calibrated model's steady state supports a...

We study the aggregate implications of (S,s) inventory policies in a dynamic general equilibrium model with aggregate uncertainty. Firms in the model's retail sector face idiosyncratic demand risk, and (S,s) inventory policies are optimal because of fixed order costs. The distribution of...

We describe and compare several algorithms for approximating the solution to a model in which inequality constraints occasionally bind. Their performance is evaluated and compared using various parameterizations of the one sector growth model with irreversible investment. We develop...

We examine asset prices and returns in the context of a version of the pure exchange economy studied in Lucas (1978) and Mehra and Prescott (1985). Our purpose is to identify the key channels by which changes in preferences affect the equity premium and the risk free rate and to develop...

Major shifts in employment between industries and between firms within industries usually accompany recessions. Although this observation suggests that exogenous changes in the optimal allocation of labor are an important source of aggregate employment fluctuations, the macroeconomic...