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...

This paper analyzes the effects of lower bound for interest rates on distributions inflation and rates. In a New Keynesian model with bound, two equilibria emerge: policy is mostly unconstrained in “target equilibrium,” whereas constrained “liquidity trap equilibrium.” Using options data inflation, we find forecast densities consistent target equilibrium no evidence favor liquidity equilibrium....

Business credit lags GDP growth by about one year. This contributes to high leverage during recessions and slow deleveraging. We show that a model in which firms use risky long-term debt replicates this adjustment of firm debt. In the model, slow-moving has important effects for real activity. High levels issued expansions are only gradually reduced recessions. generates an adverse feedback loo...

We show that during the Great Recession, more-flexible sectors paid lower sectoral bond spreads. rationalize this fact with a model input-output linkages, heterogeneous elasticities, and binding working capital constraints in use of intermediates. difference flexibility between upstream downstream is key for determining role linkages amplifying or mitigating distortions. Calibrating to US econo...

Analyzing International Monetary Fund (IMF) data, we find that overly optimistic growth expectations for a country induce economic contractions few years later. To isolate the causal effect, take an instrumental variable approach—exploiting randomness in allocation of IMF mission chiefs. We first document chiefs differ their individual degrees forecast optimism, yielding quasi-experimental vari...

We reevaluate the role of human capital in determining the wealth of nations. We use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries. Our model can explain differences in schooling and earnings profiles and, consequently, estimates of Mincerian rates of return across countries. We find that effective human capital...

We study a resource constrained assembly line balancing problem (RCALBP) presented by Ağpak and Gökçen, who developed a 0-1 integer programming model to find the optimal solution. However, this model is inefficient in solving large-scale problems. In this paper, we propose a simple efficient heuristic that is based on the widely-used ranked positional weight (RPW) rule. The example given by Ağp...

China has experienced remarkably stable growth and inflation in recent years according to official statistics. We use systematic discrepancies between cross-sectional and time-series Engel curves to construct alternative estimates of Chinese growth and inflation. Our estimates suggest that official statistics present a smoothed version of reality. Official inflation rose in the 2000s, but our e...

Investments in fiscal capacity—economic institutions for tax compliance—are an important feature of economic development. This paper develops a dynamic model to study the evolution of over time. We contrast a social planner’s investment path with politically feasible paths. Three types of states emerge in the long run: a commoninterest state where public resources are devoted to public goods, a...