Unemployment rose dramatically during the 2007-09 recession, peaking at 10 percent in October 2009. It has fallen steadily since then, at times outpacing economists' forecasts. In April, unemployment reached 6.3 percent, about two-thirds of the way back to its prerecession level. Such progress...

The labor force participation rate has been falling since 2000, a trend that accelerated somewhat during the recession of 2007-09. Some economists and journalists have questioned whether recent improvements in the labor market will cause non-participants to re-enter the labor force at a faster...

This paper extends recent developments in general-equilibrium theory and applies them to the problem of measuring the real output of an economy's insurance sector. These developments permit a priced commodity to be a complex incentive-compatible contract. These contracts are not bundles of more...

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...

Does capital-embodied technological change play an important role in shaping labour-market outcomes? To address this question, we develop a model with vintage capital and search-matching frictions where irreversible investment in new vintages of capital creates heterogeneity in productivity...

In this chapter we inspect economic mechanisms through which technological progress shapes the degree of inequality among workers in the labor market. A key focus is on the rise of U.S. wage inequality over the past 30 years. However, we also pay attention to how Europe did not experience...

We study the effects of introducing a feasible insurance market into the spatial separation model of money described in Mitsui and Watanabe (1989). We show that the insurance contract may or may not drive out money. We also show that, depending on the degree of risk aversion, the additional...

Many cases of successful economic development, such as South Korea, exhibit long periods of sustained capital accumulation rates. This empirical feature is at odds with the standard neoclassical growth model which predicts initially high and then declining capital accumulation rates. We show...