Standard economic theories have severe difficulties in simultaneously explaining a number of key aggregate empirical facts: i) there are substantial differences in capital-labor ratios across time ii) despite continuously increasing capital-labor ratios, both factors still earn non-negligible...

Standard macroeconomic models possess the undesirable feature that people stop working in the long run. Assuming standard parameters, the neoclassical model predicts that 2% of annual productivity growth leads to a 99% decline in the labor supply after 624 years. Yet, this contradicts the fact...

There are many well documented behavioral biases in financial markets. Yet, analyzing U.S. equities reveals that less than 1.21% of returns are predictable in recent years. Given the high number of biases, why are returns not more predictable? We provide two pieces of new evidence for one...