Price rigidity is the key mechanism for propagating business cycles in traditional Keynesian theory. Yet the New Keynesian literature has failed to show that sticky prices by themselves can e¤ectively propagate business cycles in general equilibrium. We show that price rigidity in fact can (by itself) give rise to a strong propagation mechanism of the business cycle in standard New Keynesian mo...

Reproductive investment and output are integral fitness components, often incorporated into life-history trade-off models and important to population dynamics. The trade-offs associated with reproduction can be dramatic in species such as snakes that make especially large investments into reproduction. Unfortunately, traditional methods used to determine reproductive investment and output are e...

The recent financial turmoil has underlined the importance of analyzing the link between banks’ balance sheets and economic activity. We develop a dynamic stochastic general equilibrium model in which bank capital mitigates an agency problem between banks and their creditors. As a result, the capital position of banks affects their ability to attract loanable funds and therefore influences the ...

We apply recent advances in time substitution modeling to examine the environmental performance of firms in Sweden’s pulp and paper industry for the years 2002 2008. Our data allow us to estimate the optimal reallocation of environmental investments, expenditures and energy use to simultaneously maximize production output and minimize emissions reductions in the years immediately before and aft...

We propose and demonstrate a simple method for guiding researchers in developing quantitative models of economic fluctuations. We show that a large class of models are equivalent to a prototype growth model with time-varying wedges that resemble time-varying productivity, labor taxes, and capital income taxes. We use data to measure these wedges, called efficiency, labor, and investment wedges,...

We study repeated irreversible investment. We assume that ex ante ownership rights are incomplete and ex post property allocation is endogenous. In a stage game, principal can renege on ex ante contract with agents (investors). To capture that ownership rights depend on prior arrangements, we introduce a dynamic game, in which player ex ante ownership shares are equal to their ex post shares in...

In this paper I analyze the impact of increasing government infrastructure investment by using existing large foreign exchange reserves in a fully optimizing model matching the Chinese economy. Even though the private investment falls in the nontradable sector, real expenditure and money balance decrease in the short run, the infrastructure investment greately enhances the efficiency and produc...

In this paper we quantitatively investigate the boom and the bust of the Japanese economy during 1980–2000 using the business cycle accounting technique. This method helps us identify the distortion margins called ''wedges'' that played a significant role in accounting for the output fluctuations. Applying our model to Japan, we find that efficiency and investment wedges can almost wholly accou...

The main purpose of this research is the study on effect of Financial and Operating Leverage and Venture Capital on Tobin's Q ratio amongst companies listed in Tehran Stock Exchange. In this research, the Holdings and Investment companies are used as statistical samples and 73 enterprises that are listed in Tehran Stock Exchange within 2001 to 2016 have been studied. The results driven by this ...