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Two investment anomalies in aggregate home-production models are investigated: excess volatility and comovement. Adjustment cost in capital accumulation reduces both volatility and the negative correlation in investments on capital goods in the market and at home. Investments comove to the...
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-skilled labor increases. This suppresses wages of low-skilled workers and/or increases their unemployment rates. On the other hand … for the years 1970 - 2004, we document how the volatility of hours worked and of wages of workers at different skill …
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