In this paper we address the question of deterministic cycles in a Ramsey model with heterogeneous in nite-lived agents and borrowing constraints, augmented to take into account the case of elastic labor supply. Under usual restrictions, not only we show that the steady state is unique, but also we clarify its stability properties through a local analysis. We nd that, in many cases, the introdu...

We analyze optimal monetary policy in a sticky price model where the central bank supplies money outright via asset purchases and lends money temporarily against collateral. The terms of central bank lending a¤ect rationing of money and impact on macroeconomic aggregates. The central bank can set the policy rate and its in‡ation target in a way that implements the …rst best long-run allocation,...

In this paper we study the cyclical behavior of job and worker flows. Wefindfor the Netherlands that employment and unemployment flows are large, relative to the stocks, that both the sum ofemployment in and outflow and the sum of job creation and destruction (je and jd) move countercyclical. Other issues that we examined include the importance ofaggregate vs. sectoral shocks, the persistence o...

We explore the connection between shock observability and equilibrium. When aggregate shocks are unobserved the rational expectations solutions remain unchanged if contemporaneous aggregate outcomes are observable, but their stability under adaptive learning must be reconsidered. We obtain learning stability conditions and show that, provided there is not large positive expectational feedback, ...

using the quarterly data of 1990:1 to 2008:1 and in a general equilibrium approach, we investigate the long run equilibrium path of the equilibrium interest rate as well as the potential output. we implement a structural reduced form of a general equilibrium model consistent with iran’s economy and estimate the unobservable variables by employing the kalman filtering technique. a exponential ut...

This paper modifies the standard Mortensen-Pissarides job matching model in order to explain the cyclical behavior of vacancies and unemployment. The modifications include strategic wage bargaining (Hall and Milgrom, 2006) and convex labor adjustment costs. The results reveal that our model replicates the cyclical behavior of both variables remarkably well. First, we show that strategic wage ba...

In the context of a standard equilibrium matching framework, this paper considers how a duration-dependent unemployment insurance (UI) system affects the dynamics of unemployment and wages in an economy subject to stochastic job-destruction shocks. It establishes that re-entitlement effects induced by a finite duration UI program generate intertemporal transfers from firms that hire in future b...

We study how total factor productivity (TFP), energy prices and the great moderation are linked. First, we estimate a joint stochastic process for the energy price and TFP and establish that until 1982:II, energy prices negatively affected productivity. This spill-over has since disappeared. Second, we show that within the framework of a Dynamic Stochastic General Equilibrium (DSGE) model, the ...

This paper provides some new empirical perspectives on the relationship between international trade and macroeconomic fluctuations in industrial economies. First, a comprehensive set of stylized facts concerning fluctuations in trade variables and their determinants is presented. A measure of the quantitative importance of international trade for the propagation of domestic business cycles is t...

We analyze a monetary model with flexible labor supply, cash-inadvance constraints, and seigniorageand tax-financed government spending. If the intertemporal elasticity of substitution of labor is greater than one, both determinate and indeterminate steady states exist. If the elasticity is less than one, there is a unique steady state, which can be indeterminate. Only in the latter case do the...