This paper introduces an internal propagation mechanism into a baseline multi-sector RBC model. The proposed mechanism, which is very similar to Keynes' spending multiplier in spirit, amplifies the impact of exogenous shocks significantly - a long-standing quest in the RBC literature. The main...

This paper examines the relationship between product demand and the pattern of rising skill premia and rising employment of skilled workers in the US and the UK since the 1980s. If more skilled workers demand more skill-intensive goods, then an increase in relative skill supply will also induce...

"In this paper we revisit two well-known facts regarding lifecycle expenditures. The first is the familiar "hump" shaped lifecycle profile of nondurable expenditures. We document that the behavior of total nondurables masks surprising heterogeneity in the lifecycle profile of individual...