Showing 1 - 10 of 48
Why do some countries industrialize later than others? Recent literature suggests that the prime reason is low agricultural productivity. This paper argues that the initial inequality of human capital could also be a contributing factor to the delayed process of industrialization characterizing...
Persistent link: https://www.econbiz.de/10005536818
This paper develops an integrated model, which addresses the recent Brandt, Cochrane and Santa-Clara (2006) puzzle of reconciling low international risk sharing with a high and variable equity premium. In addition, a new currency risk premium puzzle is also addressed. Following Kocherlakota and...
Persistent link: https://www.econbiz.de/10005536820
Using a two period model with moral hazard and uninsured risk, we argue that the decline in equity premium from its historically high level is due to a gradual elimination of barriers to universal banking. The loan contracts set up by financial intermediaries became more complete in nature with...
Persistent link: https://www.econbiz.de/10005807992
A pervasive empirical finding for the US economy is that inflation is negatively correlated with the normalized market price of capital (Tobin's q) and growth. A dynamic stochastic general equilibrium model of endogenous growth is developed to explain these stylized facts. In this model, human...
Persistent link: https://www.econbiz.de/10008527084
Labour market friction is viewed as the Tobin’s Q of an employed worker as opposed to the position of the Beveridge curve. This Tobin’s Q is inversely proportional to the average quality of the match between employers and workers. Based on this measure, I find that the labour market friction...
Persistent link: https://www.econbiz.de/10005698037
This paper investigates the drivers of industry and aggregate fluctuations. We model the dynamics of a panel of highly disaggregated manufacturing sectors. This allows us to consider directly the linkages between sectors typical of any production system, in a framework where the sectors are...
Persistent link: https://www.econbiz.de/10005536817
Recent attempts to incorporate optimal fiscal policy into New Keynesian models subject to nominal inertia, have tended to assume that policy makers are benevolent and have access to a commitment technology. A separate literature, on the New Political Economy, has focused on real economies where...
Persistent link: https://www.econbiz.de/10005536819
The paper presents a general equilibrium that can explain ten related sets of empirical results, providing a unified approach to understand usually disparate effects typically treated separately. These are grouped into two sets, one on financial development, investment and inflation, and one on...
Persistent link: https://www.econbiz.de/10005536821
PRELIMINARY AND INCOMPLETE -PLEASE DO NOT CIRCULATE
Persistent link: https://www.econbiz.de/10010576036
A common feature of exchange rate misalignments is that they produce a divergence between traded and non-traded goods sectors, which appears to pose a dilemma for policy makers. In this paper we develop a small open economy model which features traded and non-traded goods sectors with which to...
Persistent link: https://www.econbiz.de/10005807988