This paper constructs an estimated dynamic stochastic general equilibrium model to study the role of labor reallocation between production and organizational tasks within a firm in movements in measured TFP in Japan. Allocating more labor to organizational tasks strengthens the financial...

What are the effects of demographic changes on the real interest rate in Japan? We present a dynamic general equilibrium model in which demographic changes are captured by exogenous changes in the ratio of workers to the total population. Our model predicts that a decline in this ratio in the...

This paper studies the implications of financial market imperfections represented by a countercyclical external finance premium and the gradual recognition of changes in the drift of technology growth for the design of an interest rate rule. Asset price movements induced by changes in trend...

Two key features of the postwar Japanese economy are the rapid economic growth during the 1960's and early 70's and the decline in labor supply during the rapid growth period. Taking the capital stock destruction and total factor productivity (TFP) as given, a standard neoclassical optimal...

In late 1997, Korea experienced a huge and unusual economic crisis. The three main features of this crisis are the sudden recession, the rapid recovery and a consumption drop as large as the output drop. A large body of literature qualitatively explains the Korean crisis in terms of financial...