With a continuous decline in the cost of manipulating data and a continuous increase in the richness of data banks, policymakers have increasing opportunities to build and apply so-called micro-simulation models--modelsthat attempt to simulate the behavior of the individuals in a large...

Can the presence of nontraded consumption goods explain the high degree of 'home bias' displayed by investor portfolios? We find that the answer is no, so long as individuals have access to free international trade in financial assets. In particular, it is never optimal to exhibit home bias with...

We argue that time-series variation in the maturity of aggregate corporate debt issues arises because firms behave as macro liquidity providers, absorbing the large supply shocks associated with changes in the maturity structure of government debt. We document that when the government funds...

In this paper we employ index number theory in addressing the problem of adjusting real national income and real domestic product for changes in a country's terms of trade. More specifically, using recent developments in the theory of production, we address the problems related to measuring: (i)...

This paper examines the optimal labor contract in a small open economy with incomplete markets under international price uncertainty. The effect on employment, wages, and profits of different realizations of the state of nature is studied and agents' preferences concerning the implementation of...

Previous analyses of U.S. carbon taxes have tended to ignore interactions between this tax and other, pre-existing U.S. taxes. This paper assesses the effects of the carbon tax using a model that addresses these interactions. The model is unique in integrating a detailed treatment of taxes and...

This paper provides the first real-world evidence of Giffen behavior, i.e., upward sloping demand. Subsidizing the prices of dietary staples for extremely poor households in two provinces of China, we find strong evidence of Giffen behavior for rice in Hunan, and weaker evidence for wheat in...

We use data from the National Longitudinal Surveys of Youth 1979 and 1997 cohorts to compare welfare use, fertility rates, educational attainment, and marriage rates among teenage women in the years before and the years immediately following welfare reform. Our first objective is to document...

This paper argues that a linear statistical model with homoskedastic errors cannot capture the nineteenth-century notion of a recurring cyclical pattern in key economic aggregates. A simple nonlinear alternative is proposed and used to illustrate that the dynamic behavior of unemployment seems...

The paper considers avariety of evidence that casts light on the validity of the life-cycle model of consumer behavior. In the first part of the paper, simple non-parametric tests are used to examine representative agent models of consumption and labor supply. It seems extremely unlikely that...