Separately, news and sunspot shocks have been shown empirically to be determinants of changes in expectations. This paper considers both of them together in a simple New Keynesian monetary business cycle model. A full set of rational expectations solutions is derived analytically. The analytical...

A fall in house prices due to a change in fundamental value redistributes wealth from those long housing (for whom the fundamental value of the house they own exceeds the present discounted value of their planned future consumption of housing services) to those short housing. In a closed economy...

From 1850 to 2000, in Western European countries life expectancy rose from 30-40 to 80 years and the average number of children per woman fell from 4 to 5 children to slightly more than one. To gauge the economic consequences of these demographic trends, we implement an overlapping generations...

Technological change causes three consequences: it guarantees economic growth, it requires employees to acquire more skills and human capital, and it increases inequality if employees are not capable adapting to new technologies. The second consequence makes it almost necessary for employees to...

Over the period 19952006 the Spanish economy experienced a rapid increase in employment and output growth, a surge in investment over GDP, a substantial deterioration in the current account balance and an improvement in the finances of the social security system. This paper presents a dynamic...

Climate justice is conceived as the intertemporal climate equity and equality exchange amongst generations. Sustainability - intended as the interplay amongst the economy, the society, the environment, and the governance - is essential to forge the climate justice theoretical framework. On this...

In this paper, we develop an overlapping generation model with imperfect competition and land to provide a theoretical foundation for some empirical observations made since the end of the 1970s. The problem is that these new 'stylized facts' do not coincide with Kaldor's stylized facts and...

A well-established result in the literature is that Social Security reduces steady state welfare in a standard life cycle model. However, less is known about the historical quantitative effects of the program on agents who were alive when the program was adopted. In a computational life cycle...

Elected representatives serving their final period face only weak incentives to provide costly effort. However, overlapping generations (OLG) models suggest that exit prizes sustained by trigger strategies can induce representatives in their final period to provide such effort. We evaluate this...

The present paper presents a standard overlapping generations model with external habits formation and environmental quality in the utility function. Our main objective is to study the impact of external habits on capital accumulation and environmental quality on the intertemporal competitive...