Recent research has suggested that in deriving optimal policy under discretion, policymakers should react as if there were no structural inflation persistence in order to improve welfare. This paper considers whether such a strong result extends to an inflation targeting central bank with a more...

We extend the Barro (2006) closed-economy model of the equity risk premium in the presence of extreme events (disasters) to a two-country world. In this more general setting, both the output risk of rare disasters and the associated risk of a default on Government debt, can be diversiÖed. The...

We analyze a model of green technological transition along a supply chain. In each layer, a good is produced with a dirty technology, or, if the required "electriffcation" innovation has occurred, with a clean technology which uses the immediate upstream good. We show that the economy is...

Applied research often tolerates misspecification in order to reach informative conclusions. We focus on how the degree of misspecification varies with the level of aggregation of data for quasilinear utility models. We present aggregation results formalizing that the model cannot get worse when...

Das Allgemeine Verhaltensmodell von March und Simon verknüpft vier fundamentale Konstrukte der Verhaltenstheorie: das Anspruchsniveau, die Belohnungserwartung, die Zufriedenheit und die Suche nach Verhaltensweisen, die Erfolg und Zufriedenheit versprechen. Die Teilmechanismen, die in dem Modell...