Showing papers in "Review of Economic Dynamics in 2019"

TL;DR: The difference in transactions costs likely reflects the differences in market structures, since underlying technological changes have likely reduced costs of matching buyers and sellers as discussed by the authors, which is not the case in the over-the-counter market.

TL;DR: In this article, a baseline search and matching model was developed to produce a robust centrality discount in an over-the-counter (OTC) market, and the effects of heterogeneity in search technology on dealer networks and welfare were analyzed.

TL;DR: This paper proposed a new SVAR identification scheme that enables disentangling immigration shocks from other macroeconomic shocks in a sign-restricted model estimated on Norwegian data over the period 1990Q1 - 2014Q2.

TL;DR: In this paper, the authors study a dynamic market with asymmetric information that creates the lemons problem, and identify positive and negative aspects of dynamic trading, describe the optimal market design under regularity conditions and show that continuous-time trading can be always improved upon.

TL;DR: In this article, the authors show that repurchase agreements (repos) arise as the instrument of choice to borrow in a competitive model with limited commitment, and that intermediation by dealers may endogenously arise in equilibrium, with chains of repos among traders.

TL;DR: In this paper, the authors analyzed the impact of foreclosure delay on the US labor market and developed a search model in which foreclosure delay provides unemployed mortgagors with additional time to search for high-paying jobs.

TL;DR: In this paper, the authors describe a frictional world in which a worker's criminal actions are linked to his labor market outcomes and show that the relationship between the aggregate crime rate and the minimum wage is U-shaped.

TL;DR: This paper developed a Schumpeterian growth model with heterogeneous households and heterogeneous firms to explore the effects of monetary policy on innovation and income inequality, and found that under endogenous firm entry, inflation has inverted-U effects on economic growth and inequality.

TL;DR: In this paper, the authors extended a standard general-equilibrium overlapping-generations model with uninsurable wage shocks to analyze the effect of spousal and survivors benefits on the labor supply of married households and the overall economy.

TL;DR: This paper used data from U.S. BHC-affiliated securities dealers to study the use of collateral in bilateral repurchase and securities lending agreements and found a negative correlation between haircut and interest rate, a prediction in line with a large set of theories.

TL;DR: In this article, trading in secondary markets for public debt change the inherent links between monetary and fiscal policy, by studying both inflation and debt dynamics, and they find that with a low inflation target, active monetary policies are more likely to deliver real and nominal determinacy and further amplify the effectiveness of these policies in reducing steady state inflation.

TL;DR: In this paper, the authors present a general equilibrium monetary model of banking with multiple equilibria, where the multiplicity arises from a strategic complementarity in the decision to fly to liquidity and the size of the monetary injection required to eliminate the equilibrium is smaller if the central bank provides loans to banks, in comparison to using an asset purchase policy.

TL;DR: The underlying data from which the U.S. unemployment rate, labor-force participation rate, and duration of unemployment are calculated contain numerous internal contradictions as mentioned in this paper and propose a unified reconciliation.

TL;DR: In this article, the authors developed and calibrated a search and matching model of the German labour market and analyzed the impact of a 25% increase in immigration observed in the period 2012-2016.

TL;DR: In this article, the effect of credit conditions on the allocation of inputs, and their implications for aggregate TFP growth, are studied. But, the authors do not consider the impact of different credit conditions in different industries.

TL;DR: In this paper, the authors studied the extent to which working couples can insure one another against cyclical fluctuations in the labor market and examined the implications of joint household decision-making for cyclical fluctuation in the unemployment rate.

TL;DR: The authors generalize Rouwenhorst's discretization method to non-stationary AR(1) processes and evaluate the performance of these methods in the context of a canonical life cycle, income-fluctuation problem with a nonstationary income process, and also examine the case in which innovations to the persistent component of earnings are modeled as draws from a mixture of Normal distributions.

TL;DR: In this paper, the aggregate impact of targeted credit subsidies in a heterogeneous firm model with collateral constraints and endogenous entry and exit is studied. And the authors compare the welfare and aggregate productivity implications of their non-Gaussian process to those of a standard AR(1) process.

TL;DR: In this paper, the authors propose a simple diagnostic for the quantitative importance of non-fundamentalness in structural VARs, and apply their diagnostic to the identification of TFP news shocks.

TL;DR: In this article, the authors study how over-the-counter market liquidity is affected by securities lending and show that the shutdown of AIG's securities lending program in 2008 caused a statistically and economically significant reduction in the market liquidity of corporate bonds predominantly held by AIG.

TL;DR: In this paper, the authors present a theoretical macroeconomic model that investigates the link between long-run growth and labor-market dynamics, showing that high unemployment hinders skill formation, creating a drag on growth.

TL;DR: This paper conducted a wedge accounting analysis of U.S. trade balance dynamics during 1995-2011 using a dynamic general equilibrium model and found that a global saving glut explains 96 percent of trade deficits in excess of those that would have occurred naturally as a result of productivity growth and demographic change.

TL;DR: In this paper, a large-firm search-matching model with variable hours of work was used to investigate how firms utilize the intensive and extensive margins of labor adjustment over the business cycle.

TL;DR: In this article, the authors investigate the effects of a credit crunch in an economy where firms can retain a mature technology or adopt a new technology, and they find that firms' collateral eases firms' access to credit and investment but can also inhibit firms' innovation.

TL;DR: It is shown that government spending multiplier at the zero lower bound (ZLB) is larger under sticky information than under sticky prices, which could be interpreted as a serious challenge to the conventional wisdom or as suggesting that the sticky-information model is free from policy paradoxes and thus to be favored over the Calvo model.

TL;DR: In this paper, a baseline calibration of a basic New Keynesian DSGE model with capacity constraints is presented, showing that the share of firms at their production limit is strongly procyclical.

TL;DR: In this article, a model of a decentralized market is developed that features search frictions, advertised prices and bargaining, where sellers can post ask prices to attract buyers through a process of directed search, but ex post there is the possibility of negotiation.

TL;DR: In this article, the authors explored the role played by investment-specific technology (IST) shocks in emerging market business cycle fluctuations and found that a permanent US-originating IST shock is important in explaining Mexican business cycle dynamics.

TL;DR: In this paper, a unified objective measure of health status, the frailty index, defined as the cumulative sum of all adverse health indicators observed for an individual, was constructed and compared with self-reported health status.

TL;DR: In this paper, a novel decomposition of aggregate productivity is proposed to evaluate the role of allocative efficiency for the cyclical dynamics of the aggregate productivity, which is derived from the aggregation of heterogeneous firm-level production functions.