| 1. |
- Alder, Simon, et al.
(författare)
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A Theory of Structural Change That Can Fit the Data
- 2022
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Ingår i: American Economic Journal. - : American Economic Association. - 1945-7707 .- 1945-7715. ; 14:2, s. 160-206
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Tidskriftsartikel (refereegranskat)abstract
- We study structural change in the historical consumption expenditure of the United States, the United Kingdom, Canada, and Australia over more than a century. We characterize the most general class of preferences in a time-additive setting that admits aggregation of the saving decision and allows us to identify preference parameters from aggregate data. We parameterize and estimate such intertemporally aggregable (IA) preferences and discuss their properties in a dynamic general equilibrium framework with sustained growth. Our preference class is considerably more flexible than the Gorman form or PIGL, giving rise to a good fit of the non-monotonic pattern of structural change.
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| 2. |
- Almgren, Mattias, 1988-, et al.
(författare)
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Monetary Policy and Liquidity Constraints : Evidence from the Euro Area
- 2022
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Ingår i: American Economic Journal. - : American Economic Association. - 1945-7707 .- 1945-7715. ; 14:4, s. 309-340
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Tidskriftsartikel (refereegranskat)abstract
- We quantify the relationship between the response of output to monetary policy shocks and the share of liquidity-constrained households. We do so in the context of the euro area, using a Local Projections Instrumental Variables estimation. We construct an instrument for changes in interest rates from changes in overnight indexed swap rates in a narrow time window around ECB announcements. Monetary policy shocks have heterogeneous effects on output across countries. Using micro data, we show that the elasticity of output to monetary policy shocks is larger in countries that have a larger fraction of households that are liquidity constrained.
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| 3. |
- Benigno, Pierpaolo, et al.
(författare)
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Dynamic Debt Deleveraging and Optimal Monetary Policy
- 2020
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Ingår i: American Economic Journal: Macroeconomics. - : American Economic Association. - 1945-7715 .- 1945-7707. ; 12:2, s. 310-350
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Tidskriftsartikel (refereegranskat)abstract
- This paper proposes a postcrisis New Keynesian model that incorporates agent heterogeneity in borrowing and lending with a minimum set of assumptions. Unlike the standard framework, this model makes the natural rate of interest endogenous and dependent on macroeconomic policy. The main application is to study optimal monetary policy at the zero lower bound (ZLB). Such policy succeeds in raising the natural rate of interest by creating an environment that speeds up deleveraging and thus endogenously shortens the crisis and the duration of binding ZLB. Inflation should be front-loaded and should overshoot its long-term target during the ZLB episode.
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| 4. |
- Besley, Timothy, et al.
(författare)
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Weak States and Steady States : The Dynamics of Fiscal Capacity
- 2013
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Ingår i: American Economic Journal. - : American Economic Association. - 1945-7707 .- 1945-7715. ; 5:4, s. 205-235
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Tidskriftsartikel (refereegranskat)abstract
- Investments in fiscal capacity-economic institutions for tax compliance-are an important feature of economic development. This paper develops a dynamic model to study the evolution of fiscal capacity over time. We contrast a social planner's investment path with politically feasible paths. Three types of states emerge in the long run: a common-interest state where public resources are devoted to public goods, a redistributive state where additional fiscal capacity is used for transfers, and a weak state with no transfers and a low level of public goods provision. We also present some preliminary evidence consistent with the theory.
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| 5. |
- Bigio, Saki, et al.
(författare)
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Financial Risk Capacity
- 2021
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Ingår i: American Economic Journal: Macroeconomics. - : American Economic Association. - 1945-7715 .- 1945-7707. ; 13:4, s. 142-181
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Tidskriftsartikel (refereegranskat)abstract
- Financial crises are particularly severe and lengthy when banks fail to recapitalize after bearing large losses. We present a model that explains the slow recovery of bank capital and economic activity. Banks provide intermediation in markets with information asymmetries. Large equity losses force banks to tighten intermediation, which exacerbates adverse selection. Adverse selection lowers bank profit margins, which slows both the internal growth of equity and equity injections. This mechanism generates financial crises characterized by persistent low growth. The lack of equity injections during crises is a coordination failure that is solved when the decision to recapitalize banks is centralized.
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| 6. |
- Björklund, Maria, et al.
(författare)
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Fixed-Wage Contracts and Monetary Non-neutrality
- 2019
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Ingår i: American Economic Journal. - : AMER ECONOMIC ASSOC. - 1945-7707 .- 1945-7715. ; 11:2, s. 171-192
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Tidskriftsartikel (refereegranskat)abstract
- We study the importance of wage rigidities for the monetary policy transmission mechanism. Using uniquely rich micro data on Swedish wage negotiations, we isolate periods when the labor market is covered by fixed-wage contracts. Importantly, negotiations are coordinated in time but their seasonal patterns are far from deterministic. Using a two-regime VAR model, we document that monetary policy shocks have a larger impact on production during fixed-wage episodes as compared to the average response. The results do not seem to be driven by the periodic structure, nor the seasonality, of the renegotiation episodes.
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| 7. |
- Broer, Tobias
(författare)
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The Wrong Shape of Insurance? : What Cross-Sectional Distributions Tell Us about Models of Consumption Smoothing
- 2013
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Ingår i: American Economic Journal. - : American Economic Association. - 1945-7707 .- 1945-7715. ; 5:4, s. 107-140
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Tidskriftsartikel (refereegranskat)abstract
- This paper shows how two standard models of consumption-risk-sharing-self-insurance through borrowing and saving and limited commitment to insurance contracts-replicate similarly well the standard, second-moment measures of insurance observed in US micro data. A nonparametric analysis, however, reveals strongly contrasting and counterfactual joint distributions of consumption, income and wealth. Method of moments estimation shows how measurement error in consumption eliminates excessive skewness and smoothness of consumption growth. Moreover, counterfactual nonlinearities disappear at high-estimated risk aversion under self-insurance, but are a robust feature of limited commitment. Its shape of insurance thus argues in favor of the self-insurance model.
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| 8. |
- Carlsson, Mikael, 1972-, et al.
(författare)
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Endogenous Separations, Wage Rigidities, and Unemployment Volatility
- 2022
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Ingår i: American Economic Journal. - : American Economic Association. - 1945-7707 .- 1945-7715. ; 14:1, s. 332-354
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Tidskriftsartikel (refereegranskat)abstract
- We show that in microdata, as well as in a search and matching model with flexible wages for new hires, wage rigidities of incumbent workers have substantial effects on separations and unemployment volatility. Allowing for an empirically relevant degree of wage rigidities for incumbent workers drives unemployment volatility as well as the volatility of vacancies and tightness to that in the data. Thus, the degree of wage rigidity for newly hired workers is not a sufficient statistic for determining the effect of wage rigidities on macroeconomic outcomes. This finding affects the interpretation of a large empirical literature on wage rigidities.
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| 9. |
- Giannetti, Mariassunta, et al.
(författare)
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On the real effects of bank bailouts : Micro evidence from Japan
- 2013
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Ingår i: American Economic Journal: Macroeconomics. - : American Economic Association. - 1945-7715 .- 1945-7707. ; 5:1, s. 135-167
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Tidskriftsartikel (refereegranskat)abstract
- Exploiting the Japanese banking crisis of the 1990s as a laboratory, we investigate the effects of bank bailouts on the supply of credit and the performance of banks' clients. Our findings indicate that the size of capital injections relative to the initial financial condition of banks is crucial for the success of bank bailouts. Capital injections that are large enough to reestablish bank capital requirements increase the supply of credit and spur investment. In contrast, not only do capital injections that are too small fail to increase the supply of credit, but they also encourage the evergreening of nonperforming loans. (JEL E44, G21, G28, G32, G34)
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| 10. |
- Gross, Till, et al.
(författare)
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Dynamic Capital Tax Competition under the Source Principle
- 2022
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Ingår i: American Economic Journal. - : American Economic Association. - 1945-7707 .- 1945-7715. ; 14:3, s. 365-410
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Tidskriftsartikel (refereegranskat)abstract
- We explore the short- and long-run implications of tax competition between jurisdictions, where governments can only tax capital at source. We do this in the context of a neoclassical growth model under commitment and capital mobility. We provide a new theoretical perspective on the dynamic capital tax externalities that emerge in this model. Numerically, we show that the net capital tax externality is positive in the short run but converges to zero in the long run. We also find that noncooperative source-based capital taxes are initially positive and slowly decline toward zero.
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