I characterize cyclical fluctuations in the cross-sectional dispersion of firm-level productivity in the U.S. manufacturing sector. Using the estimated dispersion, or "risk," stochastic process as an input to a baseline DSGE financial accelerator model, I assess how well the model reproduces...

We study the implications of internal consumption habit for new Keynesian dynamic stochastic general equilibrium (NKDSGE) models. Bayesian Monte Carlo methods are employed to evaluate NKDSGE model fit. Simulation experiments show that internal consumption habit often improves the ability of...

Empirical results on the link between financial development and economic growth is mixed in Turkey. However, existing studies did not take into account the fact that Turkey has experienced endemic political and economic instabilities over extended periods. As a consequence of such instabilities,...

Christopher D. Carroll is an economics professor at Johns Hopkins University Baltimore and research associate at NBER. He obtained his BA from Harvard University in 1986 and his PhD from MIT in 1990. He first worked as an economist at the Federal Reserve Board and later took a job at Johns...

The paper proposes to analyze the evolution of foreign trade during the crisis in Romania. The evolution of foreign trade is analyzed using a simulation model. The period of analysis is 2006-2014. The data source is Eurostat and National Bank of Romania. Also, based on these data, we propose an...

This paper presents a Keynesian critique of Steve Keen's treatment of the aggregate demand–credit–endogenous money nexus. It argues his analytic intuition is correct but is developed in the wrong direction. Keen's fundamental relation describing determination of AD in an endogenous...

This paper conducts a quantitative analysis of the role of financial shocks and credit frictions affecting the banking sector in driving U.S. business cycles. I first document three key business cycle stylized facts of aggregate financial variables in the U.S. banking sector: (i) Bank credit,...

A new macroeconomic model is presented, which makes it possible to take a fresh look both at the long-term equilibrium growth process and at short-term deviations from it. Its key hypothesis is investment-to-profits equality. This hypothesis has classical roots and corresponds to the Ricardian...

More advanced technologies demand higher degrees of specialization - and longer chains of production connecting raw inputs to final outputs. Longer production chains are subject to a "weakest link" effect: they are more fragile and more prone to failure. Optimal chain length is determined by the...