A number of recent studies have documented extensive downward nominal wage rigidity (dnwr) for job stayers in many oecd countries. However, dnwr for individual workers may induce downward rigidity or 'a floor' for the aggregate wage growth at positive or negative levels. Aggregate wage growth...

What is the role of large players" like hedge funds and other highly leveraged institutions in speculative attacks? In recent theoretical work, large players may induce an attack by an early move, providing information to smaller agents. In contrast, many observers argue that large players are...

We examine fiscal adjustment episodes in 24 OECD countries in order to find how austerity affects debt and growth, and whether the choice of fiscal instrument matters for the results. Influential existing studies argue that spending cuts are more likely to successfully reduce debt and enhance...

We examine fiscal adjustment episodes in 24 OECD countries in order to find how austerity affects debt and growth, and whether the choice of fiscal instrument matters for the results. Inuential existing studies argue that spending cuts are more likely to successfully reduce debt and enhance...

We investigate empirically the effect of government purchases on unemployment in 20 OECD countries, for the period 1960-2007. Compared to earlier studies we use a data set with more variation in unemployment, and which allows for controlling for a host of factors that influence the effect of...

The last 20 years, the importance of a number of behavioral features have been widely accepted within economics, and they are now regularly included in standard macro models. Where have this development led us? I argue that the insights from behavioral economics have led to important progress in...

We develop a model of credit rating agencies (CRAs) based on reputation concerns. Ratings a ffect investors' choice and, thereby, also issuers' access to funding and default risk. We show that in equilibrium - the informational content of credit ratings is inferior to that of CRAs' private...

Over the past 20 years, macroeconomists have incorporated more and more results from behavioral economics into their models. We argue that doing so has helped fixed deficiencies with standard approaches to modeling the economy—for example, the counterfactual absence of inertia in the standard...

During the last 20 years, the importance of a number of behavioral features has been widely accepted within economics, and they are now regularly included in standard macro models. Where has this development led us? I argue that the insights from behavioral economics have led to important...