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This paper proposes a model in which the removal of barriers to trade and factor mobility is associated with endogenous fragmentation of the value-added chain. Fragmentation is the outcome of cost competition; the profit-maximizing choice of cost structure by monopolistically competitive firms....
Persistent link: https://www.econbiz.de/10012786254
Using time-diary data from 25 countries, we demonstrate that there is a negative relationship between real GDP per capita and the female-male difference in total work time per day -- the sum of work for pay and work at home. In rich northern countries on four continents, including the United...
Persistent link: https://www.econbiz.de/10012760268
One of the long-standing questions in economics is whether or not wages will fall sufficiently in recessions so as to avoid increases in unemployment. Put differently, if the competitive market wage declines, will employers simply force their employees to accept lower wages as well? As an...
Persistent link: https://www.econbiz.de/10005730500
Persistent link: https://www.econbiz.de/10008590501
One of the long-standing puzzles in economics is why wages do not fall sufficiently in recessions so as to avoid increases in unemployment. Put differently, if the competitive market wage declines, why don't employers simply force their employees to accept lower wages as well? As an alternative...
Persistent link: https://www.econbiz.de/10010983862
In this paper, I investigate the scope of a model with exogenous habit formation - or quot;catching up with the Joneses,quot; see Abel (1990) - to generate the observed equity premium as well as other key macroeconomic facts. Along the way, I derive restrictions for four out of eight parameters...
Persistent link: https://www.econbiz.de/10012726709
Past empirical research on monetary policy in open economies has found evidence of the 'delayed overshooting', the 'forward discount' and the 'exchange rate' puzzles. We revisit the effects of monetary policy on exchange rates by applying Uhlig's (2005) identification procedure that involves...
Persistent link: https://www.econbiz.de/10012727123
This paper analyzes dynamic equilibrium risk sharing contracts between profit-maximizing intermediaries and a large pool of ex-ante identical agents that face idiosyncratic income uncertainty that makes them heterogeneous ex-post. In any given period, after having observed her income, the agent...
Persistent link: https://www.econbiz.de/10012762692
Risk premia in the consumption capital asset pricing model depend on preferences and dividends. We develop a decomposition which allows for the separate treatment of both components. We show that preferences alone determine the risk-return trade-off measured by the Sharpe-ratio
Persistent link: https://www.econbiz.de/10012775079
Many asset pricing puzzles can be explained when habit formation is added to standard preferences. We show that utility functions with a habit then gives rise to a puzzle of consumption volatility in place of the asset pricing puzzles when agents can choose consumption and labor optimally in...
Persistent link: https://www.econbiz.de/10012775265