Our very simple two agent New Keynesian model is highly stylised. It consists of an entrepreneur, who owns the economies' firms, consumes and saves, but does not work (or does not receive wage income), while the worker consumes and works, but cannot save. The allocation of the ability to save...

We show that the distributional consequences of fiscal consolidations depend significantly on the level of private indebtedness. Austerity leads to a strong and persistent increase in income inequality when private debt is high. In contrast, there are no discernible distributional effects when...

The U.S. wage and earnings distributions display significantly higher levels of inequality today compared to the late 1960's. The aim of this paper is twofold. First, we want to assess to what extent the observed changes in inequality can be explained by a model that incorporates the...

This paper examines the effects of expansionary technology shocks (shocks that increase labor productivity and factor inputs) as opposed to contractionary technology shocks (shocks that increase labor productivity, but decrease factor inputs). We estimate these two shocks jointly based on a...

We address the effects of FDI on the labor share in developing countries. Our theory relies on the impacts of FDI on productive heterogeneity in a frictional labor market. FDI have two opposite effects: a negative force originated by technological advance, and a positive force due to increased...

The corporate sector has turned from a net borrowing position to a net lending position in many advanced countries over the past decades. This phenomenon is rather unusual as the corporate sector had historically borrowed funds from other sectors in the economy. In this paper, we analyze how...

The economic impact of Artificial Intelligence (AI) is studied using a (semi) endogenous growth model with two novel features. First, the task approach from labor economics is reformulated and integrated into a growth model. Second, the standard represen- tative household assumption is rejected,...

In this paper we investigate the relevance of bargaining institutions for the decline of the labor share. Several explanations for the decline exist, which consider the relevance of technology, globalization and markups. Neglected so far is the influence of bargaining institutions, in particular...

The value of the Slovak long-run elasticity substitution is relatively slow – about 0.10. It follows from the estimate of low-frequency econometric model. Econometric form is given by the capital demand derived from the first-order conditions of the firm maximizing its profit. Due to the...

In our research we estimate the elasticity of substitution post-communist economies integrated in European Union. There are many approaches to estimate the production function coefficients as the elasticity of substitution. We argue that a frequency panel model is suitable econometric tool for...