In this paper, we incorporate a price search decision into a life cycle model and differentiate consumption from expenditure. Consumers with low wealth and bad income shocks search more for cheaper prices and pay less, which makes their consumption higher than in a model without search option. A...

We extend the standard Eaton and Gersovitz (1981) sovereign default model to study bailout policies. In our setup a country that concentrates a significant fraction of bond holders decide on a period by period basis whether to bailout a debtor government. The combination of bailout policies and...

Search theory routinely assumes that decisions about the acceptance/rejection of job offers (and, hence, about labor market movements between jobs or across employment states) are made by individuals acting in isolation. In reality, the vast majority of workers are somewhat tied to their...

Between 1980 and 2005, the incarceration rate in the United States increased fourfold. At this level, 6.6% of the population will be imprisoned for a year or more during their lifetime. We provide a comprehensive analysis of the eects of increased incarceration rates on all actors in labor...

In this paper I analyze the effects of innovations in information technology on the mortgage and housing markets using a life-cycle model with incomplete markets and idiosyncratic income, as well as moving and house price shocks. I explicitly model the housing tenure choices of households....

contracts to prospective home buyers and the terms of these contracts depend on the observable characteristics of households. Households are born as either good credit risk types---having a high time discount factor---or bad types---having a low time discount factor. The type of the household is...

Search theory routinely assumes that decisions about acceptance/rejection of job offers (hence, about labor market movements between jobs or across employment states) are made by individuals acting in isolation. In reality, the vast majority of workers are somewhat tied to their partners into...

We quantify the contribution of women's labor force attachment on the declining trend in interstate migration. Using CPS and SIPP data, we first document that families in which both spouses have similar incomes, the propensity to migrate is significantly lower than in families with unequal...

Finally, we plan to use the analytical characterization of the model's reservation wage policies to outline a feasible method to identify and estimate structural models of joint search and location decisions.

This paper focuses on how to obtain numerical solutions to emerging-market DSGE models with occasionally binding constraints by using the Euler equation, rather than using value functions of households. The main point is that the Euler-equation approach works in a fast and simple way for a...