Supply-side policies can play a role in fighting a low aggregate demand that traps an economy at the zero lower bound (ZLB) of nominal interest rates. Reductions in mark-ups or future increases in productivity triggered by supply-side policies generate a wealth effect that pulls current consumption and output up. Since the economy is at the ZLB, increases in interest rates do not undo this weal...

Using a general equilibrium life cycle model with endogenous labor supply and idiosyncratic risks in both income and medical expenses, we argue that employmentbased health insurance is an important reason why Americans work much more than Europeans. In contrast to Europeans, who get universal health insurance from the government, most working-age Americans get health insurance through their emp...

Land use impacts of biofuel expansion have attracted considerable attention because of the implications for climate change, the environment, and food supply. To examine these impacts, we set up an economic framework that links input use and land allocation decisions with ethanol and agricultural commodity markets. Crops can be substitutes or complements in supply depending on the relative magni...

Price changes and output growth, both at the aggregate and the sectoral level, appear to be negatively correlated. At a basic level, this suggests that sectoral “supply” shocks are more prevalent than sectoral “demand” shocks. However, it is not clear what these sectoral price-output correlations mean once one thinks in terms of general equilibrium. To help us understand the implication of thes...

We use generalized method of moments to estimate a rational expectations aggregate demand/aggregate supply macroeconomic model for the US economy. Variants of the model have been extensively used in analyses of optimal monetary policy under rational expectations. Our aim is to examine whether supply or demand shocks have predominated in the postwar era, and whether shocks of either type have be...

An aggregate game is a normal-form game with the property that each player’s payoff is a function only of his own strategy and an aggregate function of the strategy profile of all players. Aggregate games possess a set of purely algebraic properties that can often provide simple characterizations of equilibrium aggregates without first requiring that one solves for the equilibrium strategy prof...

Aggregate supply is an old idea. Although discussed by Keynes and the early Keynsians, most recent econometric models can justly be criticized for not adequately developing the supply side. It is therefore exciting to review a supply-side model created by one of the most prominent model-builders. The Evans model was commissioned by the Senate Finance Committee as an attempt to incorporate suppl...

Forty years ago the Europeans (here French and British) used to work more than the Americans. They now work less. The aim of this paper is to provide a coherent picture of these changes. To do so we split the overall level of work activity into the number of individuals in work and the intensity of work supplied by those in work. This reflects the distinction between whether to work and how muc...

w hether the united kingdom (uk) should remain in the european :union: (eu) or not has been a fiercely debated issue both before and after the referendum in the uk on june 23, 2016. the main purpose of this paper is to evaluate the pros and cons of the uk leaving the eu. it is concluded that if the uk leaves the eu, the resulting economic shock would risk adverse effects on macroeconomic variab...