This paper analyzes the welfare costs of business cycles when workers face uninsurable idiosyncratic labor income risk. In accordance with the previous literature, this paper decomposes labor income risk into an aggregate and an idiosyncratic component, but in contrast to the previous...

Die derzeitige Konjunkturkrise ist am aktuellen Rand eine Konsumkrise und in ihrer Dimension deutlich stärker als während der globalen Finanzmarktverwerfungen von 2008/2009. Der private Konsum hat sich in den 15 Jahren bis zum Ausbruch der Corona-Pandemie in Deutschland ähnlich gut entwickelt...

Business cycles reflect changes over time in the amount of trade between individuals. In this paper we show that incorporating explicitly intra-temporal gains from trade between individuals into a macroeconomic model can provide new insight into the potential mechanisms driving economic...

All else equal, higher wages translate into higher inflation. More rigid wages imply a weaker response of inflation to shocks. This view of the wage channel is deeply entrenched in central banks’ views and models of their economies. In this paper, we present a model with equilibrium...

This paper estimates the impact on the US economy of four types of uncertainty about (i) government spending, (ii) tax changes, (iii) public debt sustainability and (iv) monetary policy. Following a one standard deviation shock, uncertainty about debt sustainability has the largest and most...

This paper first reviews a number of stylised facts concerning OECD country business cycles over the past four decades. In general, the amplitude of business cycles has fallen, driven mainly by declining fluctuations of domestic demand. As a result, international divergencies of cyclical...

We show how on-the-job search and the propagation of shocks to the economy are intricately linked. Rising search by employed workers in a boom amplifies the incentives of firms to post vacancies. In turn, more vacancies increases job search. By keeping job creation costs low for firms,...

Although the cyclical aspects of worker reallocation are investigated in numerous studies, only scarce empirical evidence exists for Germany. Kluve, Schaffner, and Schmidt (2009) emphasize the heterogeneity of cyclical influences for different subgroups of workers, defined by age, gender and...

Although the cyclical aspects of worker reallocation are investigated in numerous studies, only scarce empirical evidence exists for Germany. Kluve, Schaffner, and Schmidt (2009) emphasize the heterogeneity of cyclical influences for different subgroups of workers, defined by age, gender and...

While the volatility of job creations has been studied extensively, the survival chances of new jobs are less researched. The question when and how to expand a firm is of importance, both from the firms and from a macro perspective. Adjustment cost theories and arguments about option values of...