We study term and inflation risk premia in real and nominal bonds, respectively, in an equilibrium model calibrated to United States data. Nominal wage and price rigidities, and an interest-rate monetary policy rule characterize our model economy. Wage rigidities induce positive term and...

What is the response of aggregate consumption to a deficit-financed tax cut? It is well-known that intergenerational transfers are key to answer this question. I address this issue by studying a heterogeneous-agents overlapping-generations economy with imperfect altruism. The model generates...

Capital markets function as aggregators of private information and in an environment with imperfectly informed firms, guide investment and production decisions. We study the implications of poorly functioning capital markets for the misallocation of factors of production across heterogeneous...

We study the problem of optimal social insurance when agents are privately informed and the government cannot commit to a particular allocation. Contrary to the previous literature, we assume that agents' types have some persistence. We show that under some conditions it is optimal for the...

It is well documented that hazard rates and entry wages decline with unemployment duration and are procyclical. These outcomes may be explained on the basis of workers' invariant characteristics and composition variation with unemployment duration and over the business cycle. To explore it...

This paper assess increasing wage inequality by showing that the top deciles of college earners are enjoying significant relative wage growth, which is underpinned by the link between ex ante math ability, math-heavy college majors and highly quantitative occupations. This mechanism is further...

This paper uses a database covering the universe of French firms for the period 1990-2007 to provide a forensic account of the role of individual ifrms in generating aggregate fluctuations. We set up a simple multi-sector model of heterogeneous firms selling to multiple markets to motivate a...

We analyze the macroeconomic effects of variations in household leverage in an open economy using a quantitative general equilibrium model. The framework features debt by borrowers limited to a fraction of the market value of their real estate holdings, which serve as collateral. Domestic and...

The effective marginal tax rates on returns to capital assets show considerable amount of variation depending on the asset type in the U.S. corporate tax code. For instance, the effective marginal tax rate on the return to communications equipment is 19% whereas it is above 35% for...

There is a negative mean-dispersion relationship between the log of mean annual hours in an occupation and the standard deviation of log annual hours in that occupation. We document this pattern using data from the 1976-2011 Current Population Survey (CPS) and various Survey of Income and...