By endowing his agents with simple forecasting models, or representations, Woodford (1990) found that finite state Markov sunspot equilibria may be stable under learning. We show that common factor representations generalize to all sunspot equilibria the representations used by Woodford (1990). We find that if finite state Markov sunspots are stable under learning then all sunspots are stable u...

This paper provides a dynamic optimization model of durable good inventories to study the interactions between investment demand and production of capital goods. There are three major findings: First, capital suppliers’ inventory behavior makes investment demand more volatile in equilibrium; Second, equilibrium price of capital is characterized by downward stickiness; Third, the responses of th...

Does a heterogeneous agents version of a neoclassical model with labor}leisure choice replicate the distributions of consumption and working hours observed in the crosssectional data? Does incorporating heterogeneity enhance the aggregate performance of the representative agent model? We address these questions in a complete market model economy with two sources of heterogeneity: initial endowm...

We re-examine the empirical relevance of the cost channel of monetary policy (e.g. Ravenna andWalsh, 2006), employing recently developed moment-conditions inference methods, including identi…cation-robust procedures. Using US data, our results suggest that the cost channel e¤ect is poorly identi…ed and we are thus unable to corroborate the previous results in the literature. Keywords: Cost chan...

US federal transfers to individuals are large, countercyclical, vary geographically, and often credited with helping stabilize regional economies. This paper estimates the short-run effects of these using plausibly exogenous variation in temporary stimulus payments permanent Social Security benefit increases. States that received larger tended grow faster contemporaneously, a multiplier around ...

This article reviews the global health and economic consequences of 1918 influenza pandemic, with a particular focus on topics that have seen renewed interest because COVID-19. We begin by providing an overview key contextual epidemiological details as well data are available to researchers. then examine effects mortality, fertility, economy in short medium run. The role non-pharmaceutical inte...

Analyzing International Monetary Fund (IMF) data, we find that overly optimistic growth expectations for a country induce economic contractions few years later. To isolate the causal effect, take an instrumental variable approach—exploiting randomness in allocation of IMF mission chiefs. We first document chiefs differ their individual degrees forecast optimism, yielding quasi-experimental vari...

Credit spreads display occasional spikes and are more strongly countercyclical in times of elevated financial stress. Financial crises extreme cases this nonlinear behavior, featuring skyrocketing credit spreads, sharp losses bank equity, deep recessions. We develop estimate a macroeconomic model with banking sector which banks’ leverage constraints occasionally binding equity issuance is endog...

The COVID-19 pandemic has exposed the economy to immense distress, ruptured multiple systems and left out of breath. present study made an exploratory attempt unleash business-related issues faced by textile entrepreneurs India (Punjab) due COVID-19. data were collected from 123 industry in Punjab. Factor analysis regression have been used for purpose analysis. It was found that major include r...