The surge of interest in intergenerational transfers in the past decade has sparked a debate over the motivation for them. Are transfers given out of altruism or part of an exchange? While each motive is probably at work to some extent, they know little about whether one motive predominates. The...

This paper uses multilevel factor models to characterize within- and between-block variations as well as idiosyncratic noise in large dynamic panels. Block-level shocks are distinguished from genuinely common shocks, and the estimated block-level factors are easy to interpret. The framework...

This paper provides evidence that the two leading principal components in a panel of 23 commodity convenience yields have statistically and quantitatively important predictive power for inflation even after controlling for unemployment gap and oil prices. The results hold up in out-of-sample...

Financing constraints can arise when there are important information asymmetries in financial markets. Using Canadian panel data, the authors reject a symmetric information specification of investment behavior in favor of an agency cost specification in which the shadow cost of finance can...

Relative prices are nonstationary and standard root-T inference is invalid for demand systems. But demand systems are nonlinear functions of relative prices, and standard methods for dealing with nonstationarity in linear models cannot be used. Demand system residuals are also frequently found...

Many continuous-time term structure of interest rate models assume a factor structure where the drift and volatility functions are affine functions of the state-variable process. These models involve very specific parametric choices of factors and functional specifications of the drift and...