An, Sungbae; Chang, Yongsung; Kim, Sun-Bin - University of Rochester - Center for Economic Research … - 2008
Accounting for observed fluctuations in aggregate employment, consumption, and real wage using the optimality conditions of a representative household often requires preferences that are incompatible with economic priors (e.g., Mankiw, Rotemberg, and Summers 1985). This discrepancy between the...