Macroeconometric equivalence means that estimates of DSGE models using first-order approximations to equilibrium conditions fail to distinguish between alternative preference/technology configurations. Microeconomic dissonance means that the underlying microeconomic differences between...

A dynamic general equilibrium model to study the relationship between monetary policy and movements in risk is developed. Variation in risk arises because households face fixed costs of transferring cash across financial accounts, implying that some households rebalance their portfolios...

We provide a brief rejoinder to Krugman [2008, Response to Nelson and Schwartz. Journal of Monetary Economics 55, this issue] on three issues that are central to his original New York Review of Books article and his reply to our setting the record straight: (i) criticisms of Friedman; (ii)...