Estimates of the marginal product of capital can help forecast economic growth, test competing businesscycle theories, and perform cost-benefit analysis. This paper presents annual and quarterly estimatesof the marginal product of capital in the U.S. separately for the residential and...

We model the panic of 2008 as part of the wealth and substitution effects deriving from a housing price crash that began in 2006. The dissipation of the wealth effect stimulates a reorganization of the banking industry and increases in employment, GDP, and unemployment. The release of resources...

Why has government grown in so many countries during the twentieth century? We present a simple model of political competition and show how different sources of the growth of government have different effects on the amount and structure of taxes, spending, and regulatory programs undertaken by...

"We analyze the relationship between financial development and inter-industry resource allocation in the short- and long-run. We suggest that in the long-run, economies with high rates of financial development will devote relatively more resources to industries with a 'natural' reliance on...