Review of Economic Dynamics

Fatih Guvenen · Alisdair McKay · Conor Ryan

Guvenen, McKay, and Ryan estimate a stochastic income process for US male workers that simultaneously matches five empirical regularities from Social Security Administration administrative panel data …

Fan Liang

This paper asks why small firms hold large quantities of liquid assets — cash and cash equivalents that earn low or negative real returns — even when external credit is available. The conventional …

Andrew Y. Chen · Francisco Palomino

Chen and Palomino prove a general irrelevance theorem identifying when risk aversion and time-varying risk are irrelevant for key model dynamics in representative-agent macroeconomic models. The …

Axel Gottfries

This paper resolves a long-standing theoretical impasse in labor search models: how to model wage bargaining when workers search on the job (OJS) and the quit rate depends on the wage. Shimer (2006) …

Antoine Bertheau · Rune Vejlin

Research question and motivation. On-the-job search models typically organize firms along a "job ladder" — a common ranking by workers of available jobs — but they disagree on whether the rung is best …

Ia Vardishvili

US cohorts of establishments born in recessions persistently employ fewer workers at entry and over their life cycle, yet are on average more productive than expansionary cohorts; the number of …

Tristany Armangué-Jubert · Tancredi Rapone · Alessandro Ruggieri

Firms are larger and grow faster over the life cycle in high-income countries, while labor markets in poorer countries are less competitive (employers hold more wage-setting power). The paper asks how …

Nezih Guner · Christopher Rauh · Gustavo Ventura

Guner, Rauh, and Ventura document the scope, generosity, distributional impact, and time evolution of means-tested transfers to working-age US households, and provide parametric estimates of transfer …

Barton H. Hamilton · Andrés Hincapié · Emma C. Kalish · Nicholas W. Papageorge

This paper asks why medical innovation can widen health disparities even when it unambiguously improves health for everyone who takes it. The authors argue that the standard access-versus-preferences …

Salomon Garcia-Villegas

This paper develops a quantitative general equilibrium model of the U.S. housing finance system that jointly determines mortgage credit and mortgage-backed security (MBS) issuance, with the aim of …

Vahagn Jerbashian

This paper estimates the elasticities of substitution between labor, information and communication technology (ICT) and intellectual property (IP) capital, and traditional capital using a nested …

Davin Chor · Edwin L.-C. Lai

This paper develops a tractable general equilibrium model of endogenous growth driven by cumulative innovation, and uses it to characterize optimal patent policy — both for patent breadth (via a …

Lukasz A. Drozd · Marcin Kolasa · Jaromir B. Nosal

This paper evaluates five microfounded pricing-to-market (PTM) mechanisms and one reduced-form aggregator in a two-country DSGE model with volatile exchange rates driven by financial shocks (following …

Scott French · Tess M. Stafford

A large empirical literature uses micro data to estimate the intertemporal elasticity of substitution (IES) of labor supply, a parameter crucial for understanding business-cycle fluctuations in hours …

Heejeong Kim · Jung Hwan Kim

U.S. outstanding student debt rose roughly 20-fold, from about $50 billion in 1985 to nearly $1 trillion in 2014 (about 7% of GDP), making it the second-largest form of household debt after mortgages.

Donggyu Lee

This paper asks whether the Federal Reserve's unconventional monetary policies (UMP) — specifically quantitative easing (QE) and forward guidance — exacerbated income and welfare inequality in the …

Jung Sakong

Wealth in the US is far more concentrated than income, even among the bottom 99%. In 2013, the next-49% (above the bottom 50%) earned 4.7 times the income of the bottom 50% but held 6.5 times the net …

Marc Folch · Luca Mazzone

Folch and Mazzone ask how undergraduate student debt shapes three intertwined post-college decisions — whether to pursue a post-bachelor (graduate) degree, the trajectory of earnings, and whether/when …

Sebastian Graves · Victoria Gregory · Lars Ljungqvist · Thomas J. Sargent

How does endogenizing retirement (career-length) choice change the labor-supply and human-capital implications of the canonical Heckman, Lochner, and Taber (1998a, HLT) life-cycle general-equilibrium …

Timothy Cogley · Thomas J. Sargent

This 2005 Review of Economic Dynamics paper by Timothy Cogley and Thomas J. Sargent extends their earlier Cogley-Sargent (2001) time-varying-parameter VAR (TVP-VAR) of postwar U.S.

David Altig · Lawrence J. Christiano · Martin Eichenbaum · Jesper Lindé

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 …

Thomas J. Sargent · Joseph Zeira

Israeli inflation jumped from 130% to 400% in October 1983 with no contemporaneous rise in the government deficit; Sargent and Zeira attribute the jump to the government's announced bailout of …