This paper argues that an important reason why Russia's performance and China's performance under capitalism have differed dramatically is that different arrangements governing the determination of prices and work practices evolved during the transition process. In Russia, the arrangement, which...

The United States relies for its government revenues more on the taxation of capital relative to the taxation of labor than countries in continental Europe do. In this paper we ask what can account for this. Our approach is to look at Markov perfect equilibria of a two-country growth model where...

We construct a stochastic overlapping-generations general equilibrium model in which households are subject to aggregate shocks that affect both wages and asset prices. We use a calibrated version of the model to quantify how the welfare costs of big recessions are distributed across different...

We develop an heterogeneous agent model of consumption and health choices in order to estimate the effect of heath status in the marginal utility of consumption. We use micro data from the HRS, PSID, and CEX to identify the parameters of interest from the observed consumption growth for...

In this note, we demonstrate and analyze the inability of standard neoclassical models to generate accurate estimates of the fiscal multiplier (that is, the macroeconomic response to increased government spending). We then examine whether estimates can be improved by incorporating recently...

Standard neoclassical models are unable to generate large values for the fiscal multiplier, the aggregate economic response to increased government spending. Empirical estimates place the multiplier between 0.7 and 1.0. Standard models deliver figures close to zero. In an earlier policy paper,...

We develop a theory on the joint dynamics of labor share and technology at the business cycle frequency. Our main motivating fact is the overshooting property of the labor share: After a positive technology shock, the share of output that corresponds to labor falls temporarily but it quickly...

This paper develops a new quantitative theory of long-term unsecured credit contracts. Households can default and can switch credit lines. Banks can change the credit limit at any time, but must commit to the interest rate or not depending on the regulatory setting. Without commitment, the...

Between the mid 1970's and the beginning of the 2000's the share of single females grew dramatically in the U.S. (from 21% to 32%). So did the share of single mothers (from 10% to 14%). At the same time relative wages within and between sexes underwent huge changes. In this paper we measure the...

consequently, have different redistributional properties which is what we explore in this paper. For Canada, which has a positive net asset position with respect to the rest of the world in Canadian dollar-denominated claims, we show that the magnitude of the effects of an unexpected price level...