Preliminary results show that when this model is parameterized to match a number of targets - in particular the joint cross-sectional distribution of liquid and illiquid wealth - it is able to generate responses to fiscal stimulus payments of the observed order of magnitude. The model is also...

We first document a strong negative correlation between the level of household net worth, and aggregate business cycle volatility over the past 50 years in the United States. The early 1960s and the Great Moderation of the 1980s and 1990s were periods of high asset values and low volatility. The...

We construct stochastic overlapping-generations general equilibrium models in which households are subject to aggregate shocks that affect both wages and asset prices. We use a calibrated version of the model to quantify how the welfare costs of severe recessions are distributed across different...

The use of competitive search protocols in final goods allows for the specification of models where demand shocks generate propagations that look like productivity shocks. In such environments there is a role for expansion of public expenditures during recessions. We investigate the empirical...