DSGE models are useful tools for evaluating the impact of policy changes but their use for (short-term) forecasting is still at an infant stage. Besides theory based restrictions, the timeliness of data is an important issue. Since DSGE models are based on quarterly data, they are vulnerable to...

U.S. economic growth has been gaining momentum, with the annualized growth rate of real GDP reaching 3.1% in the fourth quarter of 2010. Factoring in this good performance, the IMF has revised upward its economic outlook for 2011 by 0.7 percentage points to 3.0%. At the same time, the labor...

The new generation of dynamic stochastic general equilibrium (DSGE) models seems particularly suited for conducting scenario analysis. These models formalise the behaviour of economic agents on the basis of explicit micro-foundations. As a result, they appear less prone to the Lucas critique...

The Ellsberg paradox suggests that people's behavior is different in risky situations—when they are given objective probabilities—from their behavior in ambiguous situations—when they are not told the odds (as is typical in financial markets). Such behavior is inconsistent with subjective...

DSGE models are useful tools for evaluating the impact of policy changes, but their use for (short-term) forecasting is still in its infancy. Besides theory-based restrictions, the timeliness of data is an important issue. Since DSGE models are based on quarterly data, they suffer from the...

This paper studies housing markets with multiple segments searched by heterogeneous clienteles. We document market and search activity for the San Francisco Bay Area. Variation within narrow geographic areas is large and differs significantly from variation across those areas. In particular,...

We study the distribution of employment growth when hiring responds more to bad shocks than to good shocks. Such a concave hiring rule endogenously generates higher moments observed in establishment-level Census data for both the cross section and the time series. In particular, both aggregate...

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