This paper examines the macroeconomic effects of asset price bubbles and crashes in an overlapping generations economy. The model highlights the effects of asset price fluctuations on labor supply decisions, and demonstrates how labor market adjustment can help propagate the effects of these...

This paper analyzes the macroeconomic implications of asset price bubbles and crashes using an overlapping-generation model with endogenous labor supply. This model highlights the effects of asset price fluctuations on individuals' labor supply decision, and shows how these fluctuations can...

This paper examines the effects of asset bubbles in an overlapping generations model with endogenous labor supply. We derive a set of conditions under which asset bubbles will lead to an expansion in steady-state capital, investment, employment and output. We also provide a specific numerical...

This paper examines the macroeconomic effects of asset price bubbles and crashes in an overlapping generations economy. The model highlights the effects of asset price fluctuations on labor supply decisions, and demonstrates how labor market adjustment can help propagate the effects of these...

How does the quality of information received by voters affect political polarisation? We address this long-standing question using an election competition model in which voters have to infer an unknown state from some noisy and biased signals. Their policy preferences are shaped by the posterior...

We examine how the optimal degree of policy divergence between two policy platforms in an election is affected by two types of aggregate uncertainty: policy-related and candidate-specific. We show that when the candidate-specific uncertainty is sufficiently large, policy convergence becomes...

How does the quality of information received by voters affect political polarisation? We address this long-standing question using an election competition model in which voters have to infer an unknown state from some noisy and biased signals. Their policy preferences are shaped by the posterior...

Suburbanization in the U.S. between 1910 and 1970 was concurrent with the rapid diffusion of the automobile. A circular city model is developed in order to access quantitatively the contribution of automobiles and rising incomes to suburbanization. The model incorporates a number of driving...

The constant-relative-risk-aversion (CRRA) utility function is now predominantly used in quantitative macroeconomic studies. This function, however, is not bounded and thus creates problems when applying the standard tools of dynamic programming. This paper devises a method for "bounding" the...

This paper re-examines the Rouwenhorst method of approximating first-order autoregressive processes. This method is appealing because it can match the conditional and unconditional mean, the conditional and unconditional variance and the first-order autocorrelation of any AR(1) process. This...