An innovation in this paper is to introduce a time-to-build technology for the production of market capital into a model with home production. The paper’s main finding is that the two anomalies that have plagued all household production models—the positive correlation between business and...

This paper offers a general equilibrium model that explains how the observed correlations of money and output fluctuations may come about through endogenously determined fluctuations in the money multiplier. The model is calibrated to meet long-run (including monetary) features of the U.S....

An empirical and theoretical analysis of how changes in the monetary policy function affect the covariance structure of macroeconomic data.

A specification of the steps in designing a computational experiment to address a well-posed quantitative question, emphasizing that the computational experiment is an econometric tool used in the task of deriving the quantitative implications of theory.

We provide a theoretical interpretation of two features of international data: the countercyclical movements in net exports and the tendency for the trade balance to be negatively correlated with current and future movements in the terms of trade, but positively correlated with past movements....

A description of the method used in dynamic general equilibrium business-cycle research as applied in some recent work on open economies.

We examine the behavior of international relative prices from the perspective of dynamic general equilibrium theory, with particular emphasis on the variability of the terms of trade and the relation between the terms of trade and net exports. We highlight aspects of the theory that are critical...

In this paper, we show that the monetary rule followed by a number of key countries before 1914 represented a commitment technology preventing the monetary authorities from changing planned future policy. The experiences of these major countries suggest that the gold standard was intended as a...

An overview of some recent findings about the cyclical behavior of the aggregate labor market and its relation to the overall business cycle, discussing theory and measurement issues such as the role of household production, the impact of differences in cyclical behavior of workers with...