Probably because of their interpretability and transparent nature, synthetic controls have become widely applied in empirical research economics the social sciences. This article aims to provide practical guidance researchers employing control methods. The starts with an overview introduction estimation. main sections discuss advantages framework as a design, describe settings where reliable es...

We show that business cycles reduce welfare through a decrease in the average level of employment labor market search model with learning on job and skill loss during unemployment. Empirically, unemployment job-finding rate are negatively correlated. Since new jobs product these two from transition equation, imply fewer jobs. Learning implies resulting reduces aggregate human capital. This ince...

This paper shows that the unequal incidence of recessions in labor market amplifies aggregate shocks. Using administrative data from United States, I document a positive covariance between workers' marginal propensities to consume (MPCs) and their elasticities earnings GDP, which is key moment for new class heterogeneous-agent models. define matching multiplier as increase stemming this high MP...

This paper analyzes the implications of advertising for firm dynamics and economic growth through its interaction with R&D. We develop a model endogenous heterogeneity that incorporates decisions calibrate it to match several empirical regularities across size. Our provides microfoundations empirically observed negative relationship between both R&D intensity In calibrated model, about ...

Applying the Foster, Haltiwanger, and Krizan (2001) decomposition to plant-level manufacturing data from Chile Korea, we find that entry exit of plants account for a larger fraction aggregate productivity growth during periods fast GDP growth. To analyze this relationship, develop model firm based on Hopenhayn (1992). When introduce reforms reduce costs or barriers technology adoption into cali...

We model the world economy as one system of endogenous input-output relationships subject to frictions and study how world’s structure GDP change due changes in frictions. derive a sufficient statistic identify from observed matrix, which we fully match for year 2011. show internal impact whole that they have much larger effect on than external also use our approach role during Great Recession ...

We estimate a behavioral New Keynesian (NK) model in which households and firms plan over finite horizon. The finite-horizon planning (FHP) outperforms rational expectations versions of the NK as well other models. In FHP model, are forward-looking thinking about events their horizon but backward-looking regarding beyond that point. This gives rise to substantial aggregate persistence without r...

We study what happens to identified shocks and dynamic responses when the data generating process features q disturbances but 1 < variables are used in an empirical model. Identified linear combinations of current past values all structural do not necessarily combine same type. Theory-based restrictions may be insufficient obtain dynamics. revisit evidence regarding transmission house price ...

This paper studies the role of differences in patterns production and international trade on business cycle volatility emerging developed economies. We study a multisector small open economy which firms produce commodities manufactures. estimate model to match key cross-sectional time-series across countries. Emerging economies run surpluses deficits manufactures, while sectoral flows are balan...

This paper estimates the effects of exogenous changes in income and consumption taxes. The tax shocks are proxied with a narrative account liability United Kingdom. Income cuts have large on GDP, private consumption, investment. modest not statistically significant GDP its components. Shifting burden taxation from to is expansionary. Consistent conventional public finance theories, these result...