This paper presents a dynamic general equilibrium model with a health shock in a multi-sector model. The health shock leads to a reduction in (i) labor supply in sectors that are sensitive to pandemics such as COVID-19, (ii) the demand for products of firms in these sectors, (iii) the...

This paper studies monetary policy rules in a small open economy with Inflation Targeting, incomplete pass-through and rigid nominal wages. The paper shows that, when nominal wages are fully flexible and pass-through is low to moderate, the monetary authority should target the consumer price...

This paper studies monetary policy rules in a small open economy with Inflation Targeting, incomplete pass-through and rigid nominal wages. The paper shows that, when nominal wages are fully flexible and pass-through is low to moderate, the monetary authority should target the consumer price...

The optimality of the long-run capital-income tax rate is revisited in a simple neoclassical growth model with credit frictions. Firms pay their factors of production in advance, which requires borrowing at the beginning of the period. Borrowing, in turn, is constrained by the value of...

This paper suggests that a model in which firms face credit constrains on hiring labor can explain both the behavior of the labor wedge and the “jobless recoveries” phenomenon of the last three recessions. Using the corporate credit spread as a measure of firms' credit conditions, I show...

This paper studies the monthly net job creation (NJC) at the aggregate and the sectoral levels in the U.S. over the period 1950-2011. The paper has few important findings. First, NJC did not show a significant trend over the last six decades, which led to a fall in the NJC rate. Second, NJC was...

This paper studies the determinants of fertility in a panel of 150 developing and developed nations. The paper finds striking differences between these two groups. Taxation, income per capita and female labor-force participation positively affect fertility of the developed countries, but they do...

This paper studies optimal labor-income taxation in a simple model with credit constraints on firms. The labor-income tax rate and the shadow value on the credit constraint induce a wedge between the marginal product of labor and the marginal rate of substitution between labor and consumption....

This paper studies the government spending multiplier in the presence of the cost channel of the nominal interest rate. I find that the spending multiplier of normal times declines markedly when this channel is introduced. The rise in government spending leads to a rise in the nominal interest...

Using U.S. data for 1976-2013, this paper studies the effects of various macroeconomic variables, particularly the national debt, government budget deficits and taxes, on fertility decisions over the business cycle. A rise in the debt-GDP ratio, government spending-GDP ratio and the deficit-GDP...