This paper suggests that skill accumulation through past work experience, or "learning-by-doing", can provide an important propagation mechanism for initial shocks, as the current labor supply affects future productivity. Our econometric analysis uses a Bayesian approach to combine micro-level...

This paper assesses biases in policy predictions due to the lack of invariance of "structural'' parameters in representative-agent models. We simulate data under various fiscal policy regimes from a heterogeneous-agents economy with incomplete asset markets and indivisible labor supply....

"This paper assesses biases in policy predictions due to the lack of invariance of "structural'' parameters in representative-agent models. We simulate data under various fiscal policy regimes from a heterogeneous-agents economy with incomplete asset markets and indivisible labor supply....