Cronbach’s alpha is a popular method to measure reliability, e.g. in quantifying the reliability of a score to summarize the information of several items in questionnaires. The alpha coefficient is known to be non-robust. We study the behavior of this coefficient in different settings to...

This paper attempts to add to the understanding of the causes for the differing recent developments in inequality in OECD countries. The similarity of shocks and technological changes affecting these countries suggests that interactions of these shocks and countryspecific institutions are...

U.S. velocity of base money exhibits three distinct trends since 1950. After rising steadily for 30 years, it flattens out in the 1980s, and falls substantially in the 1990s. This paper explores whether the observed secular movements in velocity can be accounted for exclusively by endogenous...

The authors use the permanent income hypothesis as the framework to analyze a number of results from recent empirical macroeconomic research. First, they demonstrate that the "productivity" shock isolated in both the three and six variable models of King, Plosser, Stock, and Watson (1991)...

This paper applies a factor model to the study of risk sharing among U.S. states. The factor model makes it possible to disentangle movements in output and consumption due to national, regional, or state-specific business cycles from those due to measurement error. The results of the paper...

This paper studies the determinants of house prices in eight transition economies of central and eastern Europe (CEE) and 19 OECD countries. The main question addressed is whether the conventional fundamental determinants of house prices, such as GDP per capita, real interest rates, housing...

We set up a simple overlapping generation model that allows us to distinguish between life expectancy and active life expectancy. We show that individuals optimally adjust to a longer active life by educating more and, if the labor supply elasticity is high enough, by supplying less labor. When...

In 2015-2016 Germany experienced a wave of predominantly low-skilled refugee immigration. We evaluate its macroeconomic and distributional effects using a quantitative overlapping generations model calibrated using German micro data to replicate education and productivity differentials between...

Okun’s Law postulates a stable relationship between quarterly output growth and changes in (un)employment. This proposition has so far been tested with macroeconomic data at the highest level of aggregation. The paper goes beyond that in extending the analysis to industry data from...

Concave hiring rules imply that firms respond more to bad shocks than to good shocks. They provide a unified explanation for several seemingly unrelated facts about employment growth in macro and micro data. In particular, they generate countercyclical movement in both aggregate conditional...