The Great Depression stopped the economic expansion that the Colombian economy experienced in the 1920s. The collapse of the world economy was transmitted to the country's financial system through two mechanisms: the dramatic reduction in the prices of coffee, the main export, and the sudden...

Sovereign debt crises have regained attention since the recent crises in several European countries. This paper focuses on a particular aspect of the debt crisis literature: the impact of sovereign default on economic growth. Previous research agrees on the negative impact, but not on size and...

The recent global recession requires policy makers to identify the relative importance of shock transmission mechanisms in each region and devise counter policy measures against future idiosyncratic shocks. In the last decade, world dynamics have changed considerably due to increased openness...

We introduce a summary indicator based on the Canadian Survey of Consumer Expectations (CSCE). This indicator provides a summary measure of consumer opinions that we can track over time. We construct three underlying indexes-financial health, labour market and consumer spending-that capture...

In this paper, I unveil a novel mechanism through which a housing market boom leads to a recession following the burst of a housing market bubble. Overbuilding, characterized by increased residential construction driven by optimism or misinformation rather than sound economic foundations, crowds...

This paper studies the conduct of monetary policy in presence of heterogeneous exposure to energy price shocks between the employed and the unemployed, as it is documented by data from the euro area Consumer Expectation Survey. I account for this evidence into a tractable Heterogeneous-Agent New...

Barsky and Sims (2012, AER) demonstrated, via indirect inference, that confidence innovations can be viewed as noisy signals about medium-term economic growth. They highlighted that the connection between confidence and subsequent activity, such as consumption and output, is primarily driven by...

This paper introduces the rational inattention hypothesis (RI) -- that agents process information subject to finite channel constraints -- into a stochastic growth model with permanent technology shocks. We find that RI raises consumption volatility relative to output by introducing an...

While this is typically ignored, the properties of the stochastic process followed by aggregate consumption affect the estimates of the costs of fluctuations. This paper pursues two approaches to modelling aggregate consumption dynamics and to measuring how much society dislikes fluctuations,...

An informal model is described that leads to multiple macroeconomic equilibria as a consequence of random variation in the relative amounts of technological change for new and existing goods. The novel observation is that the rate of introduction and market penetration of new goods vis-a-vis...