In structural vector autoregressive (SVAR) models identifying restrictions for shocks and impulse responses are usually derived from economic theory or institutional constraints. Sometimes the restrictions are insufficient for identifying all shocks and impulse responses. In this paper it is pointed out that specific distributional assumptions can also help in identifying the structural shocks....

The budget constraint requires that, eventually, consumption must adjust fully to any permanent shock to income. Intuition suggests that, knowing this, optimizing agents will fully adjust their spending immediately upon experiencing a permanent shock. However, this paper shows that if consumers are impatient and are subject to transitory as well as permanent shocks, the optimal marginal propens...

We examine the impact of the coal boom of the 1970's and the coal bust of the 1980's on disability program participation. These shocks provide clear evidence that as the value of labor-market participation increases, disability program participation falls. For the Disability Insurance program, the elasticity of payments with respect to local earnings is between -0.3 and -0.4 and for Supplementa...

Research background: We analyse the added worker effect (AWE) and discouraged (DWE) from an aggregate perspective. The first refers to increase in labour force participation response a decrease wage rate. second decision by workers who have been unsuccessful their job search leave market or participation. For our analysis, we use case of Poland, country with persistently low rate.
 Purpose...

Health Inequality over the Life-Cycle We investigate the evolution of health inequality over the life-course. Health is modeled as a latent variable that is determined by three factors: endowments, and permanent and transitory shocks. We employ Simulated Minimum Distance and the Panel Study of Income Dynamics to estimate the model. We estimate that permanent shocks account for under 10% of the ...

We construct two simple examples that help to clarify the role of a key assumption in the analysis of price or quantity controls of greenhouse gases in the presence of uncertain costs. Traditionally much has been made of the fact that greenhouse gases are a stock pollutant, and that therefore the marginal benefit curve must be relatively flat. This fact is said to establish the preference of a ...

Assume that each infinitely-lived consumer in the economy is endowed with one unit of labor which is supplied inelastically in an aggregate labor market, and that the individual consumer’s labor income is subject to multiplicative idiosyncratic transitory shocks i,t+1 such that Et[̃i,t+1] = 1. 1 Idiosyncratic ‘permanent labor income’ is defined as the level of labor income that would obtain for...

We investigate the optimal response of unemployment insurance to economic shocks, both with and without commitment. The policy commitment follows a modified Baily-Chetty formula that accounts for job search responses future UI benefit changes. As result, tends front-load UI, unlike discretionary policy. In shocks intended mimic those induced COVID-19 recession, we find large transitory increase...

this paper estimates the determinants of inflation in iran using a linear and non- linear regression model over the period 1959-2008. in the model specification, the conventional variables (liquidity, production and exchange rate) as well as positive and negative oil revenue shocks, monetary disequilibrium, and demand gap are considered. the results show that nonlinear time series regression mo...