The paper asks whether inflationary shocks are regressive, and demonstrates that the answer depends critically on the source of the shock. A single aggregate inflation statistic conceals radically …
Embedding a costly-state-verification debt contract -- in which a borrower's external finance premium depends inversely on net worth -- into an otherwise standard New Keynesian model, this chapter …
Estimated New Keynesian models reconcile inertial inflation with Calvo pricing only by forcing firms to re-optimise prices once every two years or more, which micro price data contradict. Making …
PublishedClassicJournal of the European Economic AssociationOnline 12 Jun 2020Published Apr 2021
A HANK model that is tractable enough to solve on paper, built by grafting Diamond-Mortensen-Pissarides search frictions onto a New Keynesian economy and then imposing assumptions that make the wealth …
PublishedReview of Economic StudiesOnline 13 Jan 2026Published Sep 2026
How does partial capital irreversibility — arising from a wedge between the purchase price and the resale (discounted) price of capital — shape the persistence and amplitude of aggregate capital …
Using an analytically tractable heterogeneous-agent New Keynesian model with CARA preferences and normally distributed idiosyncratic income risk, the paper shows that whether incomplete markets …