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horizontal and vertical innovation match financial data well due to countercyclical dividends which are either procyclical or … acyclical in US data. Countercyclical dividends redistribute income from consumption towards investment in innovation improving … growth prospects which are reflected in asset prices. In the horizontal innovation model of Kung and Schmid (2015 …
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This paper analyses how labour market heterogeneity affects unemployment, productivity and business cycle dynamics that are relevant for monetary policy. The model matches remarkably well the short and long run dynamics of skilled and unskilled workers. Skill mismatch and skill-specific labour...
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