A large amount of recent research in macroeconomics emphasizes the role of uncertainty as a driver of business cycles, but the majority of this work takes uncertainty as exogenous. This paper proposes a model where aggregate uncertainty is endogenously time-varying through financial distress...

In France, firms with 50 employees or more face substantially more regulation than firms with less than 50. As a result, the size distribution of firms is visibly distorted: there are many firms with exactly 49 employees. We model the regulation as a sunk cost that must be paid the first time...

We analyze the macroeconomic effects of variations in household leverage in an open economy using a quantitative general equilibrium model. The framework features debt by borrowers limited to a fraction of the market value of their real estate holdings, which serve as collateral. Domestic and...