In a life-cycle model, a retiree faces stochastic health depreciation and chooses consumption, health expenditure, and the allocation of wealth between bonds, stocks, and housing. The model explains key facts about asset allocation and health expenditure across health status and age. The portfolio share in stocks is low overall and is positively related to health, especially for younger retiree...

This paper develops Michael Grossman's demand-for-health model by letting the depreciation rate depend upon the level of health, by letting the incidence and size of illness be uncertain and by investigating how the individual's demand for health would be affected by the introduction of insurance. Beside the more theoretical results, there are also some results with important policy implication...

Using longitudinal data from the Dutch Labor Force Supply Panel (OSA), this article examines how unemployment scarring (i.e., wage setbacks following unemployment) and its underlying mechanisms operate across gender in the Netherlands over the period 1985-2000. A series of fixed effect panel models that correct for unobserved heterogeneity, reveal a notable disparity in unemployment scarring by...

Three of the papers examine the relationship between financial asset valuations and macroeconomic fundamentals. Hall tries to account for corporate equity valuations using fundamentals such as taxes, risk, and depreciation with mixed results. Bernanke and Kuttner also examine the fundamental determinants of equity prices, but they focus only on monetary policy surprises, which appear to have a ...

When the exchange rate is either fixed or floating, the currency trading of the central bank is relatively well understood. In intermediate regimes, or ‘dirty floats’, three different alternative behaviours of the central bank can be conjectured: symmetrically preventing changes of the exchange rate vs. preventing appreciation vs. preventing depreciation. In this paper, we describe a testing st...

Coyote depreciation often causes severe losses of livestock and wildlife in many areas. The use of toxicants is banned for coyote control in the United States necessitating the consideration of alternative methods of control of these predators. This review deals with a class of possible alternatives for population control (reproductive inhibitors) and the conditions associated with selection an...

Preliminary Draft Comments welcome This paper studies the role of banks in the propagation of nominal shocks in a small open economy. It builds on the framework developed in Edwards and Végh (1997), by relaxing the assumption of perfect asset substitutability between foreign and local bonds. The main results are as follows. Financial liberalization induces a decrease in loan spreads, an expansi...

This paper studies the dynamics of the U.S. external position for the past 35 years, and examines alternative paths for future external adjustment. We develop a new present value expression for the external position that embeds the restrictions of international solvency and can be easily empirically evaluated with time series methods. Our empirical model accounts for almost all the variations i...

In this note, we investigate how the depreciation of a manufactured stock and the related accumulation of a waste stock can alter the optimal path of the capital-resource economy. It is shown that the optimal consumption path is affected by how the disuse pattern of the manufactured stock in question is distributed, specifically with forward-looking terms.

Recent empirical research documents that an exogenous rise in government purchases in a given country triggers a persistent depreciation of its real exchange rate— which raises an important puzzle, as standard macro models predict an appreciation of the real exchange rate. This paper presents a simple model with limited international risk sharing that can account for the empirical real exchange...