Abstract We develop a graphical 3-equation New Keynesian model for macroeconomic analysis to replace the traditional IS-LM-AS model. The new graphical IS-PC-MR model is a simple version of the one commonly used by central banks and captures the forward-looking thinking engaged in by the policy...

Abstract The technology growth trends that underlie recent productivity patterns are investigated in a framework that incorporates investment-specific technological progress. Structural-break tests and regime-shifting models reveal the presence of a downward shift in total factor productivity...

Abstract This paper analyzes some unnoticed predictions of the two-sector AK model in line with the recent literature on embodied technical change. Firstly, by confining constant returns to capital to the investment sector, the AK model generates endogenously the secular downward trend of the...

Abstract The United States relies for its government revenues more on the taxation of capital relative to the taxation of labor than countries in continental Europe do. In this paper we ask what can account for this. Our approach is to look at Markov perfect equilibria of a two-country growth...

Abstract We examine the link between increases in housing wealth, financial wealth, and consumer spending. We rely upon a panel of 14 countries observed annually for various periods during the past 25 years and a panel of U.S. states observed quarterly during the 1980s and 1990s. We impute the...

Abstract This paper revisits the issue of what factors produced the macroeconomic policies that led to the Great Inflation of the 1970s. I emphasize that a satisfactory explanation should satisfy two important criteria. First, it must be consistent with the record of views on the economy,...

This paper provides a general methodology for introducing capital accumulation into economies with private information and heterogeneous agents. The agents operate a stochastic neoclassical production technology with capital and labor input. I study a moral hazard economy with unobservable input...

This paper studies the implications for the optimal policy of introducing an exogenous minimum wage into a standard public finance model. I present a dynamic general equilibrium model with a Ramsey planner deciding about public spending, labor income taxes and debt. I find that for sufficiently...

This paper re-examines the importance of human capital in explaining economic growth. Previous studies are extended by including schooling investments of both time and goods within the school year, a human capital externality, and imperfect substitution between white collar and manual tasks. The...

The growth literature has not yet fully established how data on educational attainment should be introduced in theories involving human capital. This paper examines alternative specifications of human capital within the Mincerian class that once incorporated in standard growth models may...