I consider a real business cycle model in which agents have private information about an idiosyncratic shock to their value of leisure. I consider the mechanism design problem for this economy and describe a computational method to solve it. This is an important contribution of the paper since...

We build a model of endogenous credit cycles arising from the dynamics of adverse selection. Heterogeneous entrepreneurs trade productive assets in an anonymous market subject to financial frictions. Cream-skimming rent-seekers create lemon assets that can be traded. Lemon assets are...

This paper studies the effect of inter-entrepreneurial productivity variation on investment under asymmetric information and signalling in the credit market. When productivity is not sufficiently dispersed, safe-type entrepreneurs face borrowing constraints and might under- or over-invest...

One explanation for firms' inventory cycles is that they are tied to the calendar year, reflecting fundamental demand seasonality. But we find that these cycles are also tied to the fiscal year, an accounting artifact constructed by firms themselves. Specifically, inventory is lower at fiscal...

We assess how survey expectations impact production and pricing decisions on the basis of a large panel of German firms. We identify the causal effect of expectations by matching firms with the same fundamentals but different views about the future. The probability to raise (lower) production is...

We assess how firm expectations about future production impact current production and pricing decisions. Our analysis is based on a large survey of firms in the German manufacturing sector. To identify the causal effect of expectations, we rely on the timing of survey responses and match firms...

In this paper a multivariate dynamic conditional correlation (DCC) general autoregressive conditional heteroskedasticity (GARCH) framework is employed to study dynamics of sectoral comovement across manufacturing sectors both in Germany and in the United States. Asymmetric effects both in...