Structural Vector Autoregressions with a differenced specification of hours (DSVAR) suggest that productivity shocks identified using long--run restrictions lead to a persistent and significant decline in hours worked. This evidence calls into question standard business cycle models in which a...

This paper questions Galí [1999]?'s empirical methodology that aims to evaluate the effects of technology shocks. We show that specification error can be large enough to reverse the sign of hours worked?' response. An applied researcher using this methodology might mistakingly conclude that...

This paper studies the local dynamic properties of a simple general equilibrium model with Social VAT. Strict balanced budget rules often lead to real indeterminacy of aggregate equilibrium, leaving room for «sunspots» fluctuations. In a closed-economy setup, social VAT escapes this property...