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It has been shown that under perfect competition and a Cobb-Douglas production function, a basic real business cycle model may exhibit indeterminacy and sunspot fluctuations when income tax rates are determined by a balanced-budget rule. This paper introduces in an otherwise standard real...
Persistent link: https://www.econbiz.de/10010790380
This dissertation investigates the properties of macroeconomic fluctuations in a small open economy under the presence of sovereign default risk. International borrowing and lending arise from the interaction between a risk averse sovereign representative agent in a small open economy trying to...
Persistent link: https://www.econbiz.de/10009431297
We investigate cyclical changes in workers' task portfolios, highlighting their direction, magnitude, and distribution. Task changes are not only very common but provide information about the skills required across jobs. During recessions, a larger share of employer switches do not involve task...
Persistent link: https://www.econbiz.de/10015194672
In this paper, I explore how optimal aggregate dynamics can be shaped by the presence of moral hazard in unemployment insurance. I also analyze the optimal provision of unemployment insurance and the implications for the amount of cross-sectional heterogeneity. The economy that I consider embeds...
Persistent link: https://www.econbiz.de/10013364528
Quantitative models of sovereign debt predict that countries should default during deep recessions. However, empirical research on sovereign debt has found a surprisingly large share of "good times" defaults (i.e., defaults that happen when GDP is above trend). Existing evidence also indicates...
Persistent link: https://www.econbiz.de/10013432965
Output gap revisions can be large even after many years. Real-time reliability tests might therefore be sensitive to the choice of the final output gap vintage that the real-time estimates are compared to. This is the case for the Federal Reserve's output gap. When accounting for revisions in...
Persistent link: https://www.econbiz.de/10013531826
The cross-sectional average of pairwise correlations across stocks traded on the NYSE, AMEX, and Nasdaq is a powerful predictor of U.S. economic activity at a horizon of one to four years. Its predictive ability is on a par with the slope of the yield curve and significantly exceeds that of some...
Persistent link: https://www.econbiz.de/10014000532
In an integrated global economy, the economic fallout of war is not confined to the country where the conflict is fought but spills over to other countries. We study the economic effects of large interstate wars using a new data set spanning 150 years of data for more than 60 countries. War on a...
Persistent link: https://www.econbiz.de/10014478444
This paper evaluates complementarities of labor market institutions and the business cycle in the context of a stochastic dynamic general equilibrium model economy. Matching between workers and vacancies with endogenous time spent in search, Nash{bargained wages, payroll taxation, and...
Persistent link: https://www.econbiz.de/10010310356
This paper considers a sticky price model with a cash-in-advance constraint where agents forecast inflation rates with the help of econometric models. Agents use least squares learning to estimate two competing models of which one is consistent with rational expectations once learning is...
Persistent link: https://www.econbiz.de/10010311996