This paper gauges the strenght of precautionary saving motives by estimating the coefficient of prudence from the U.K. Family Expenditure Survey data set (a time series of cross-sections). Most instrumental variables estimates reveal that larger uncertainty leads to smaller current saving, and...

In this paper, we test whether labor-hoarding environments with basic and augmented laws of motion provide an adequate explanation for observed business cycle dynamics. The basic law of motion assumes that the information set used by economic agents to forecast future forcing variables includes...

This paper gauges the causal relationship between external and budget deficits by using Blanchard's overlapping generations model. This model sests the twin deficits hypothesis (i.e. there is a positive relationship between the deficits) and the Ricardian equivalence hypothesis (i.e. there is no...