Can economic theory help - forecasting key macroeconomic variables? This article aims to provide some insight into the question by drawing lessons from the literature. The definition of ‘economic theory’ includes a broad range of examples, such as accounting identities, disaggregation and...

Europe’s financial landscape has substantial institutional variety. This reflects different societal responses to (or preferences with regard to) trade-offs. For monetary policy, it implies a challenging environment, particularly in times of financial crises. Using a non-linear VAR-model we...

Four alarming stylized facts have recently emerged in the United States: (i) a decline in the labor share of income; (ii) a decline in labor productivity; (iii) an increase in the top 1% wealth share, and (iv) an increase in the capital-income ratio. In Capital in the XXI Century, Thomas...

This paper presents a macroeconomic agent based model with endogenous innovation-driven growth and knowledge accumulation which aims to analyze the underlying causes of the recent increase in market concentration, by focusing on the interplay of technical change and market power, and the...

Four alarming stylized facts have characterized the recent economic history of the United States: (i) a fall in labor productivity; (ii) a fall in the labor share, (iii) an increase in the capital income ratio, and (iv) an increase in the wealth share owned by top income earners. In this paper,...

Economic growth is ardently emphasized as a requisite underpinning not only for improving individual income, the standard of living, and a society's infrastructure, but also to attain equitable distribution of necessities, critical resources, and public goods such as education, healthcare, and...

We evaluate the income elasticity of the aggregate budget share spent on a sub-group of commodities, in a competitive framework, by a continuum of agents having the same income, but heterogeneous behavior described by an "homothetic preferences scaling factor" having a bounded Pareto...

The upward sloping trend of rents and house prices has initiated a debate on the consequences of surging housing costs for wealth inequality and welfare. We employ a frictionless two-sectoral macroeconomic model with a housing sector to investigate the dynamics of wealth inequality and the...