Starr-McCluer (1996) documented an empirical finding showing that US households covered by health insurance saved more than those without coverage, which is inconsistent with the standard consumption-saving theory. This study conducts a structural analysis and suggests that institutional...

Past government spending in Japan is imposing a significant fiscal burden that is reflected in a net debt to output ratio near 150 percent. In addition, an aging Japanese society implies that public expenditures and transfers payments relative to output are projected to continue to rise until at...

We explore the quantitative implications of uncertainty about the length of life and a lack of annuity markets for life cycle consumption in a general equilibrium overlapping generations model in which markets are otherwise complete. Empirical studies find that consumption displays a hump shape...

(Copyright: Elsevier)

We study how an occasionally binding capacity constraint affects the properties of business cycles. A real business cycle model is constructed where production takes place at individual plants and the number of plants operated varies over the cycle. The capacity constraint binds in states where...