This paper studies the wasteful effect of bureaucracy on the economy by addressing the link between opportunistic behavior of government bureaucrats and the public sector wage bill. In particular, public officials are modeled as individuals competing for a larger share of those public funds. A...

This note explores the problem of non-convex labor supply decision in an economy with both discrete and continuous labor decisions. In contrast to the setup in Mc-Grattan, Rogerson and Wright (1997), here each household faces an indivisible labor supply choice in the market sector, while it can...

This paper explores the problem of non-convex labor supply decisions in an economy with both private and public sector jobs. In contrast to Vasilev (2015a), the sectoral labor choice is made in a sequential manner. Still, the micro-founded representation obtained from explicit aggregation over...

This paper describes the lottery- and insurance-market equilibrium in an economy with non-convex private- and public-sector employment. In contrast to Vasilev (2015a, 2015b), the public-sector labor supply decision is a sequential one. This requires two separate insurance market to operate, one...

This paper explores the effects of fiscal policy in an economy based on indirect taxes, and taxing all income at the same rate. The focus of the paper is on the relative importance of consumption vs. income taxation, as well as on the provision of valuable public services. To this end, a...

This study follows Rotemberg and Woodford (1998) and estimates a three-equation model of output, interest rate and inflation, in order to evaluate alternative rules by which the UK monetary authority may decide on setting the main interest rate. As in the original paper, the model setup is a...

This notes outlines how to solve Hayashi and Prescott (2007) "The 1990s: Japan's Lost Decade", extended with an exogenous population growth and labour-augmenting technical progress, using a Linear-Quadratic Approximation as in Ljungqvist and Sargent (2004).

This paper aims to shed light on the importance of health considerations for business cycle fluctuations and the effect of health status on labor productivity and availability of labor input for productive use. To this end, Grossman's (2000) partial-equilibrium framework with endogenous health...