Showing papers in "Review of Economic Dynamics in 2016"

TL;DR: In this article, an empirical search-matching model was developed for analyzing the wage, employment and welfare impact of regulation in a labor market with heterogeneous workers and jobs, which allows for the possibility of assortative matching between workers and job due to complementarities between worker and job characteristics.

TL;DR: In this paper, the macroeconomic effects of deregulating the goods and labor markets were studied and it was shown that deregulation can have short-run recessionary effects, despite being expansionary in the long run.

TL;DR: In this paper, the authors present a directed search model of the housing market, which is consistent with the observation that houses are sometimes sold above, sometimes below and sometimes at the asking price.

TL;DR: This paper developed a model of investment decisions in which uncertainty about a one-time change in tax policy induces the firm to temporarily stop investing and adopt a wait-and-see policy.

TL;DR: This paper developed a life-cycle model of the labor market in which different worker-firm matches have different quality and the assignment of the right workers to the right firms is time consuming because of search and learning frictions.

TL;DR: In this paper, the authors use a standard growth model to measure the size of this burden in the form of additional taxes required to finance these projected expenditures and to stabilize government debt, and highlight the importance of considering alternatives that attenuate the projected increases in public spending and/or enlarge the tax base.

TL;DR: In this paper, the authors characterize cyclical fluctuations in the cross-sectional dispersion of firm-level productivity using the micro-estimated dispersion, or "risk" stochastic process as an input to a baseline small-scale financial accelerator model and assess how well the model reproduces cyclical movements in both real and financial conditions of the economy.

TL;DR: In a dynamic competitive environment, switching costs have two effects: they increase the market power of a seller with locked-in customers, and they increase competition for new customers.

TL;DR: In this article, the authors formalize a more general link between fluctuations in output and fertility decisions, in simple versions of stochastic growth models with endogenous fertility, using the U.S. BBB event as a laboratory.

TL;DR: In this paper, a calibrated multi-industry growth model with many countries and with industry differences in productivity growth rates replicates the main features of the "stages of diversification".

TL;DR: In this paper, the authors investigated the impact of economic reforms on China's growth in total factor productivity (TFP), and built a model with two sectors in production, the private and the state sectors, that features capital market imperfections on the private sector.

TL;DR: In this article, a life-cycle model is constructed to understand a rich set of facts about decisions of households with different education levels, and a life cycle model is presented to understand the relationship between education level and household financial choices.

TL;DR: The authors proposed a solution method and derived very tractable sufficient conditions for determinacy and indeterminacy in the mean-square stability sense in general Markov-switching rational expectations (MSRE) models with lagged endogenous variables.

TL;DR: In this paper, the authors provide a parsimonious model that captures the key features of the current federal funds market, along with the instruments introduced by the Federal Reserve to implement its target for the federal funds rate.

TL;DR: In this article, a multisector, multicountry, Ricardian model of trade with capital accumulation is proposed to quantify the impact of trade in capital goods on economic development.

TL;DR: In this article, a dynamic general equilibrium model of heterogeneous households with production is presented, which accounts for the Pareto distributions of income and wealth in the U.S. under reasonable calibration.

TL;DR: In this article, the authors examine the value of an individual's human capital and the associated return on human capital using U.S. data on male earnings and financial asset returns and find that human capital is far below the value implied by discounting earnings at the risk-free rate.

TL;DR: In this paper, the authors introduce household production and the production of houses (construction) into a monetary model, and show that a calibrated model accounts for up to 52 % ( 87 % ) of the relationship between interest rates and housing wealth deflated by nominal output.

TL;DR: In this paper, the authors quantify the effects of the Affordable Care Act (ACA) using a stochastic general equilibrium overlapping generations model with endogenous health capital accumulation calibrated to match U.S. data on health spending and insurance take-up over the lifecycle.

TL;DR: In this paper, the authors investigate the sources of the dierences by studying quantitative properties of a multiple-worker version of the search/matching model that features endogenous job separation and intra-rm wage bargaining.

TL;DR: This paper developed a model of the venture capital market, focusing on the search process that matches capitalists with entrepreneurs, and the bargaining problem that splits the surplus between them, and provided a tractable framework for formalizing descriptive and institutional studies of this market.

TL;DR: A life cycle model of labor supply and health with heterogeneous agents is developed that predicts even more cross-country variation in the employment rates of people aged 55-64 than the data indicates.

TL;DR: In this article, the authors study the desirability of intervention during financial crisis by bailing out financial institutions and their investors and show that intervention depends on a tradeoff between incentives and insurance.

TL;DR: The authors developed a two-country DSGE model with financial intermediaries to analyze the role of cross-border bank flows in the transmission of a U.S. bank's balance sheet shock to emerging market economies.

TL;DR: This paper used a life cycle model to compare how different approaches for recycling carbon tax revenue affect the welfare of agents born in the future steady state versus agents alive when the policy is adopted.

TL;DR: The authors introduced exante heterogeneity between workers and two technology shocks, neutral and investment-specific, as the driving forces into the basic Mortensen-Pissarides search and matching model, which is simultaneously consistent with a strong response of labor market variables to cyclical fluctuations in productivity and a weaker response to changes in taxes found in cross-country data.

TL;DR: In this paper, the authors explore how the joint behavior of hiring and investment is governed by the expected present values of capital and of jobs, and find that future returns play a dominant role in determining capital and job values.

TL;DR: In this paper, the effect of a referral-restricting policy on non-networked workers can be either positive or negative, depending on model parameters, in a random search model in which there are two hiring methods, formal costly channels and referral channels.

TL;DR: In this paper, a two-sector model with search and matching friction, wage rigidity, and capital adjustment costs was proposed to explain the cross-sector correlation of the extensive margin.

TL;DR: In this paper, the authors show that modifying the objective function of a discretionary central bank to include an interest-rate smoothing objective increases the welfare of an economy in which large contractionary shocks occasionally force the policy rate to its effective lower bound.