Partial equilibrium models suggest that when uncertainty increases, agents increase savings and at the same time reduce investment in irreversible goods. This paper characterizes this problem in general equilibrium with technology shocks, additive output shocks and shocks to the marginal...

A relatively unexplored question in dynamic labour demand regards the source of adjustment costs, whether they depend on net or gross changes in employment. We estimate a structural model of dynamic labour demand where the firm faces adjustment costs related to gross and net changes in its...

This paper estimates a structural model of the employment decision of the firm. Our establishment level data displays an extreme degree of rigidity in that employment levels are largely constant throughout our sample. This can be due to the fact that establishments face large shocks but also...

This paper takes the neo classical model of the investment decision of the firm and adds a Moral Hazard problem to it. The Moral Hazard problem, which arises due to the separation between ownership and control, induces empirical results from sample splits, which are usually interpreted as a sign...

This paper studies skill-neutral technological changes in an economy where workers differ with respect to their abilities to acquire skills, implying increasing marginal costs of educating the work force. Our main result is that productivity slowdown and increasing wage dispersion can be...

This paper studies skill-neutral technological changes in an economy where workers differ with respect to their abilities to acquire skills, implying increasing marginal costs of educating the work force. Our main result is that productivity slowdown and increasing wage dispersion can be...

We characterize savings behavior around the point of the first house purchase. Using a panel data set with income and wealth information on Danish first-time house owners we document that households save for the down payment, mortgage to the limit, run down liquid assets at purchase, and adjust...

In this paper I show that the idea that firms faced with a liquidity constraint display "excess sensitivity" of employment to shocks is not correct. The employment decision is independent of the financing constraint and artificial data shows that there is no such excess sensitivity.