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High degrees of relative risk aversion induces indeterminacy in cash-in-advance economies. In a small open economy context, this paper finds that endogenous money growth rules can pre-empt such sunspot equilibria in an open economy context. The most promising candidates are policies that...
Persistent link: https://www.econbiz.de/10005511642
This paper evaluates complementarities of labor market institutions and the business cycle in the context of a stochastic dynamic general equilibrium model economy. Matching between workers and vacancies with endogenous time spent in search, Nash-bargained wages, payroll taxation, and...
Persistent link: https://www.econbiz.de/10005513594
The paper investigates the notion that preference shocks play a central role in our understanding of the Great Depression. I identify a series of universally large negative shocks which destabilized the U.S. during the 1930s. When the artificial economy is paired with variable capital...
Persistent link: https://www.econbiz.de/10005536787
The article examines the proposition that preference shocks play a central role in our understanding of the Great Depression. I identify a series of unusually large negative shocks that destabilized the U.S. economy during the 1930s. When the artificial economy is paired with variable capital...
Persistent link: https://www.econbiz.de/10005384868
Persistent link: https://www.econbiz.de/10004978086
Persistent link: https://www.econbiz.de/10004978167
We show that an otherwise standard one-sector real business cycle model with variable capital utilization and mild increasing returns-to-scale is able to generate qualitatively as well as quantitatively realistic aggregate fluctuations driven by news shocks to two formulations of future...
Persistent link: https://www.econbiz.de/10011164007
and unemployment.
Persistent link: https://www.econbiz.de/10011080666
Recent empirical evidence suggests that product creation is pro-cyclical and it occurs largely within existing firms. Motivated by these findings, the current paper investigates the role of intra-firm product scope choice in a general equilibrium economy with oligopolistic producers. We show...
Persistent link: https://www.econbiz.de/10011184657
We show that a one-sector real business cycle model with variable capital utilization and mild increasing returns-to-scale is able to generate qualitatively as well as quantitatively realistic aggregate fluctuations driven by news shocks to future consumption demand. In sharp contrast to many...
Persistent link: https://www.econbiz.de/10010897245