In this study, we set up a DSGE model with upward looking consumption comparison and show that consumption externalities are an important driver of consumer credit dynamics. Our model economy is populated by two different household types. Investors, who hold the economy's capital stock, own the...

In this study, the relation between consumer credit and real economic activity during the Great Moderation is studied in a dynamic stochastic general equilibrium model. Our model economy is populated by two different household types. Investors, who hold the economy’s capital stock, own the...

Uncertainty rises sharply during economic downturns at both the micro and macro level. Leveraging a new solution method, I study the interaction between micro and macro uncertainty in a globally solved Heterogeneous Agent New Keynesian (HANK) model with aggregate risk, counter-cyclical...

This paper presents a dynamic stochastic general equilibrium model of Ricardian business cycles. Our model is Ricardian because countries (or, equivalently, regions) trade to take advantage of their comparative advantages. Their relative efficiencies, however, change over time stochastically....

We present a calibrated general equilibrium model in which collateral constraints substantially amplify and propagate aggregate shocks through their impact on asset prices and capital allocation. Compared to previous studies, this result is more robust and comes with more realistic interest rate...