As both the natural level of output and the New Keynesian output gap cannot be observed in practice, there is quite some debate on the question how these variables look like in practice. Rather than taking the standard approach of using a time trend or the HP-filter to obtain estimates of these...

As both the natural level of output and the New Keynesian output gap cannot be observed in practice, there is quite some debate on the question how these variables look like in practice. Rather than taking the standard approach of using a time trend or the HP-filter to obtain estimates of these...

This paper solves the two-armed bandit problem when decision makersare risk averse. It shows, counterintuitively, that a more risk-averse decisionmaker might be more willing to take risky actions. The reason relates tothe fact that pulling the risky arm in bandit models produces informationon...

As the New Keynesian output gap cannot be observed, there is quite some debate on the question what this variable looks like. Rather than taking the standard approach of using a time trend or the HP-filter to estimate it, this paper separates trend from cycle via Bayesian estimation of a New...

This paper first documents the increase in the time lag with which labor input reacts to the economy's driving structural shocks ("the labor adjustment lag") that is visible in US data since the mid-1980s. We show that lagged labor adjustment is optimal in a setting where there is uncertainty...