causes adverse selection in credit markets. The models feature a new shock, referred as a lemons shock, which changes the … counter-cyclical markup in wages and a variable capital utilization rate, a lemons shock drives business cycles. A lemons … shock turns out to be equivalent to a financial shock in one model and nearly equivalent to a shock to the marginal …

simulation of a bank balance sheet shock produces a downturn of a magnitude similar to the "Great Recession" …

simulation of a bank balance sheet shock produces a downturn of a magnitude similar to the "Great Recession". …

business cycle. Second, a shock that moves the land price is capable of generating large volatility in unemployment. Our …

sentiment shock that drives the movements of bubbles and is transmitted to the real economy through endogenous credit … constraints. This shock explains most of the stock market fluctuations and sizable fractions of the variations in real quantities …