We estimate a dynamic general equilibrium model of the U.S. economy that includes an explicit household production sector and stochastic fiscal variables. We use our estimates to investigate two issues. First, we analyze how well the model accounts for aggregate fluctuations. We find that...

Standard models of public education provision predict an implicit transfer of resources from higher income individuals toward lower income individuals. Many studies have documented that public higher education involves a transfer in the reverse direction. We show that this pattern of...

Policymakers devote a great deal of attention to short-run fluctuations in the labor market. Central banks monitor indicators of labor market tightness in the conduct of monetary policy due to the potential implications for inflation. And fiscal authorities are concerned with the budget...

We examine whether the Mortensen-Pissarides matching model can account for the business-cycle facts on employment, job creation, and job destruction. A novel feature of our analysis is its emphasis on the reduced-form implications of the matching model. Our main finding is that the model can...

We document large differences in trend changes in hours worked across OECD countries over the period 1956-2004. We then assess the extent to which these changes are consistent with the intratemporal first order condition from the neoclassical growth model. We find large and trending deviations...

We show that a life cycle model with home production implies a tight relationship between key preference parameters and the changes in time allocated to home production and leisure at retirement. We derive this relationship and use data from the ATUS to explore its quantitative implications. Our...