Population growth rates have fallen considerably in most developed countries. An important question for monetary policy is whether this has led to a fall in the natural rate of interest. In representative agent models, the response of the natural rate to a fertility shock crucially depends on...

Depression affects the way that people process information and make decisions, including those involving risk and uncertainty. Our objective is to analyze the way that depressive episodes shape risk preferences and risk-taking behaviors. We are the first to address this issue using large-scale,...

Based on a behavioral stock-flow housing market model in which the expectation formation behavior of boundedly rational and heterogeneous investors may generate endogenous boom-bust cycles, we explore whether central banks can stabilize housing markets via the interest rate. Using a mix of...

We document the cyclical properties of unsecured consumer credit (procyclical and volatile) and of consumer bankruptcies (countercyclical and very volatile). Using a growth model with household heterogeneity in earnings and assets with access to unsecured credit (because of bankruptcy costs) and...

In this paper, I introduce depression to the economics of human health and aging. Based on studies from happiness research, depression is conceptualized as a drastic loss of utility and value of life (life satisfaction) for unchanged fundamentals. The model is used to explain how untreated...

When the financial positions of pension funds worsen, regulations prescribe that pension funds reduce the gap between their assets (invested contributions) and their liabilities (accumulated pension promises). This paper quantifies the business cycle effects and distributional implications of...

We ask two questions related to how access to credit affects the nature of business cycles. First, does the standard theory of unsecured credit account for the high volatility and procyclicality of credit and the high volatility and countercyclicality of bankruptcy filings found in U.S. data?...

The theory of home production suggests substitutability between market consumption and home production. The current paper estimates the intratemporal elasticity between home production and market consumption from within-person variation. Shocks in houseprices induced by the Great Recession are...

This paper argues that constraining people to choose consumption and labor under finite Shannon capacity produces results in line with U.S. business cycle data as well as secular movements in consumption and labor supply. The model has simple partial equilibrium setting in which risk averse...

An Euler condition for optimal inventory accumulation is used to obtain information on the behavior of mark ups of price over marginal cost in U.S. manufacturing and trade. Data at the two-digit SIC level are used. Mark ups appear to be procyclical in most of the two-digit SIC sectors