We embed human capital-based endogenous growth into a New-Keynesian model with search and matching frictions in the labor market and skill obsolescence

Due to their indeterminacies, static and dynamic factor models require identifying assumptions to guarantee uniqueness of the parameter estimator. The indeterminacy of the parameter estimator with respect to an orthogonal transformation is known as...

Output gap estimates at the current edge are subject to severe revisions. This study analyzes whether monetary aggregates can be used to improve the reliability of early output gap estimates as proposed by several theoretical models. A real-time...

This paper analyzes Germany’s unusual labor market experience during the Great Recession. We estimate a general equilibrium model with a detailed labor market block for post-unification Germany. This allows us to disentangle the role of institutions...

We identify the effects of the supply of mortgage credit on house prices, using the politicallydirected credit-targeting regime of Venezuela as quasi-natural experiment. We find a large effect of the supply of housing credit on time path of house...

The literature has not yet come to a consensus on the actual responses of fiscal policy to output and to past public debt levels within industrialized countries. While the cyclical adjustment literature has suggested a strong response of the primary...

Dynamic stochastic general equilibrium (DSGE) models with generalized shock processes, such as shock processes which follow a vector autoregression (VAR), have been an active area of research in recent years. Unfortunately, the structural parameters...

Labor’s share of income varies over the business cycle, and different theories of nominal rigidities predict different behaviors for labor’s share. Based on evidence from a VAR for the USA, labor’s share falls sharply after a positive productivity...

This paper documents a puzzling fact, namely that there is a significant negative relation between employment protection legislation and the usage of the intensive margin of labor market adjustments. I make use of a real business cycle model and...

Business investment in the euro area strongly declined during the Global Financial Crisis and the Sovereign Debt Crisis. It has not yet rebounded to its pre-crisis trend despite the very expansionary monetary policy measures of the ECB. We analyze...