Showing 1 - 10 of 110
Persistent link: https://www.econbiz.de/10005429644
This paper studies whether fiscal policy satisfies a borrowing constraint. Direct tests of the present-value constraint are rare, despite widespread discussion of the feasibility of current policy. We examine monthly data on Canadian federal government finances using tests for cointegration. We...
Persistent link: https://www.econbiz.de/10005787692
Much recent business cycle research focuses on moments of macroeconomic aggregates. We construct examples of real business cycle sample paths for output, consumption, and employment for the U.S. economy. Annual sample paths are generated from an initial condition in 1925, measured technology and...
Persistent link: https://www.econbiz.de/10008765728
The paper investigates portfolio strategies and derivative market making when the trader does not know the correct model. One of the puzzles from last summer's LTCM collapse was that when the Russian government defaulted, liquidity dried up. Antidotal evidence suggests that people were unable to...
Persistent link: https://www.econbiz.de/10005537574
Persistent link: https://www.econbiz.de/10005420294
Persistent link: https://www.econbiz.de/10005425260
We inject aggregate uncertainty - risk and ambiguity - into an otherwise standard business cycle model and describe its consequences. We find that increases in uncertainty generally reduce consumption, but they do not account, in this model, for either the magnitude or the persistence of the...
Persistent link: https://www.econbiz.de/10011265740
that central banks incur for implementing Taylor rule type policies.
Persistent link: https://www.econbiz.de/10011081131
Identification problems arise naturally in forward-looking models when agents observe more than economists. We illustrate the problem in several macro-finance models with Taylor rules. When the shock to the rule is observed by agents but not economists, identification of the rule's parameters...
Persistent link: https://www.econbiz.de/10011083775
We provide a user's guide to exotic' preferences: nonlinear time aggregators, departures from expected utility, preferences over time with known and unknown probabilities, risk-sensitive and robust control, hyperbolic' discounting, and preferences over sets ( temptations'). We apply each to a...
Persistent link: https://www.econbiz.de/10005088791