The market value of U.S. corporations was nearly halved following the oil crisis of October 1973. Real energy prices more than doubled by the end of the decade, increasing energy costs and spurring innovation in energy-saving technologies by corporations. This paper uses a neo-classical growth...

In this paper we present a recursive method for the numerical simulation of nonoptimal dynamic equilibrium models. This method builds upon a convergent operator over an expanded set of state variables. The fixed point of this operator defines the set of all Markovian equilibria. We study...

This paper evaluates the role of the construction sector in accounting for the performance of the U.S. economy in the last decade. During the Great Recession (2008-09) employment in the construction sector experienced an unprecedented decline that followed the largest expansion in employment...

In this paper we revisit the connection between changes in interest rates, loan-to-value ratios and expectations in inaÌuencing housing prices. We construct a two good general equilibrium model in which housing is a composite good produced using structures and land. We show that changes in...

In this paper we use a standard neoclassical model supplemented by some frictions to understand large price swings in the housing market. We construct a two good general equilibrium model in which housing is a composite good produced using structures and land. We revisit the connection between...

The market value of U.S. corporations, relative to the replacement cost of their tangible assets, declined by about 50% in 1973-74, and stagnated at that level for the following decade. This collapse in market valuations exactly coincides with the Oil Crisis of October 1973. Over the 1973-78...

A growing literature argues that the Information Technology rev- olution caused the stock market crash of 1973-1974, its subsequent stagnation and eventual recovery. This paper employs general equi- librium theory to test whether this good news hypothesis is consistent with the behavior of US...

The weight of the average American adult male and female has increased by 16 and 14 pounds respectively and obesity rates have doubled since the early 1960s. Recent studies show these changes in weight can be attributed to the dramatic rise in the consumption of food away from home. We...

equilibria in models with heterogeneous agents and market frictions. This method is based upon a convergent operator over an expanded set of state variables. The fixed point of this operator defines the set of all Markovian equilibria. We study approximation properties of the operator as well as...

Recessions typically bring about expansions in government expenditures. More important, when a strong sector-specific negative shock coincides with the onset of the recession, it is commonly argued that a government ``stimulus" may be beneficial. The logical argument is as follows: resources are...