We analyse the dynamics resulting from social learning in a simple general equilibrium (GE) model, whose structure is similar to the one underlying macroeconomic models of the New Macroeconomic Synthesis. The economy is composed by households and firms who exchange labour and consumption goods...

We present a dynamic general equilibrium model of bank runs where global games are utilized as the equilibrium selection criterion. Coordination failures among bank creditors lead to panic-based runs. An endogenous borrowing constraint emerges as banks internalize the impact of their leverage...

We describe some of the main features of the recent vintage macroeconomic models used for monetary policy evaluation. We point to some of the key differences with respect to the earlier generation of macro models, and highlight the insights for policy that these new frameworks have to offer. Our...

This paper computes the welfare gains from inflation reduction in an estimated dynamic stochastic general equilibrium model of the U.S. economy. Both steady state and transitional welfare results are reported. I find important steady state welfare gains from a 10 percentage points drop in...

In this paper we estimate a small forward-looking macroeconomic model for EMU which allows us to analyze the transmission mechanism of the monetary policy implemented by the European Central Bank through an interest rate rule that stabilizes inflation and output. The estimation of this model,...

Rational expectations has been the dominant way to model expectations, but the literature has quickly moved to a more realistic assumption of boundedly rational learning where agents are assumed to use only a limited set of information to form their expectations. A standard assumption is that...

The aim of this paper is to investigate the relationship between increasing inequality and financial fragility in an agent based macroeconomic model. We analyse the effects of a non-linear relationship between wealth and consumption on the evolution of the economic system. Preliminary results...

This paper describes a package which uses MATLAB functions and routines to estimate VARs, local projections and other models with classical or Bayesian methods. The toolbox allows a researcher to conduct inference under various prior assumptions on the parameters, to produce point and density...