This paper studies the business-cycle fluctuations predicted by a two-sector endogenous-business-cycle model with sector-specific external increasing returns to scale. It focuses on aspects of actual fluctuations that have been identified both as defining features of the business cycle and as...

The frequency of job loss among workers in late career has risen disproportionately in recent years. The effects of job loss on these workers are potentially severe: their earnings capacity, savings, and retirement expectations are likely to be dramatically affected and they may take...

This paper examines the U.S. Economy in World War II. It argues that the mobilization must be viewed as a rapidly evolving historical process rather than, as is often the case, a single differentiated event. For example, the employment of unemployed resources, a factor often cited to explain the...

Falling house prices have caused numerous home owners to suffer capital losses. Those with little home equity may be prevented from moving because proceeds from the sale of their house are insufficient to repay their mortgage and provide a new down payment. A data set of mortgages is used to...

There has been much informal speculation on how changes in economic circumstances contribute to partnership dissolution; however there has been little empirical work testing these speculations. This paper aims to shed light on how micro level factors such as receiving a financial windfall and...

Hardly any of the law's subjects know the text of the provisions that govern their conduct. Even less would they be able to handle this text properly, were they to get access to it. Nonetheless the law firmly believes that it is not feckless. This paper solves the puzzle by drawing on four...

The welfare cost of imperfect competition in the product and labor market as well as distortionary taxation is quantified in a dynamic general equilibrium model parameterized to fit the U.S. economy. We find that the welfare cost of imperfect competition in the product market is 35.74 percent...

The New-Keynesian Phillips curve has recently become an important ingredient in monetary policy models. However, using limited information methods, the empirical support for the New-Keynesian Phillips curve appear to be mixed. This paper argues, by means of Monte Carlo simulations with a simple...

Much empirical evidence suggests that wage increases do not lead to inflation. This paper demonstrates that a 2-sector dynamic general equilibrium model calibrated to the U.S. economy is able to explain this evidence. We quantify the effect of an increased wage-markup on the inflation rate in...

This paper argues that assuming a common information set shared by the public and the central bank may be inappropriate when one is concerned with the value of information itself. Specifically, we argue that it may lead one to draw the conclusion that monetary policy do not benefit from accurate...