Search Results
Report
Endogenous policy choice: the case of pollution and growth
What determines the relationship between pollution and growth? Are the forces that explain the behavior over time of these quantities potentially useful to understand more generally the relationship between policies and growth? In this paper, we make a first attempt to analyze the equilibrium behavior of two quantities?the level of pollution and the level of income?in a setting in which societies choose, via voting, how much to regulate pollution. Our major finding is that, consistent with the evidence, the relationship between pollution and growth need not be monotone and that the precise ...
Journal Article
Policy Instability and the Risk-Return Trade-Off
What is the impact of large swings in economic policy on the risk-return trade-off faced by investors? What is the impact of changes in policy regimes on investment strategies? In this paper we study the impact on returns of switches between periods of market-friendly economic policies and periods of populist policies. To quantify the impact of policy instability, we use data from Argentina—a country that has experienced frequent and very large regime changes—and find that the risk-return for individual assets and minimum variance portfolios are quite different across regimes. We then ...
Journal Article
\\"Frictions in financial and labor markets\\": a summary of the 35th Annual Economic Policy Conference
This article contains synopses of the papers presented at the 35th Annual Economic Policy Conference of the Federal Reserve Bank of St. Louis held October 21-22, 2010. The conference theme was ?Frictions in Financial and Labor Markets.? Leading participants in this field presented their research and commentary.
Conference Paper
Inflation, growth, and financial intermediation
Journal Article
Inflation, growth, and financial intermediation
Working Paper
Lifetime labor supply and human capital investment
We develop a model of retirement and human capital investment to study the effects of tax and retirement policies. Workers choose the supply of raw labor (career length) and also the human capital embodied in their labor. Our model explains a significant fraction of the US-Europe difference in schooling and retirement. The model predicts that reforms of the European retirement policies modeled after the US can deliver 15?35 percent gains in per-worker output in the long run. Increased human capital investment in and out of school accounts for most of the gains, with relatively small changes ...
Report
Why are married women working so much?
We study the large observed changes in labor supply by married women in the United States over 1950-1990, a period when labor supply by single women has hardly changed at all. We investigate the effects of changes in the gender wage gap, technological improvements in the production of nonmarket goods and potential inferiority of these goods on understanding this change. We find that small decreases in the gender wage gap can explain simultaneously the significant increases in the average hours worked by married women and the relative constancy in the hours worked by single women, and single ...
Working Paper
Sectoral shocks, reallocation frictions, and optimal government spending
What is the optimal policy response to a negative sectoral shock? How do frictions in goods and labor markets affect the nature and speed of the process of reallocating resources across alternative uses? Should government controlled inputs be allocated to compensate for frictions faced by the private sector or, rather, should they be deployed to complement private sector decisions? In this paper we make a first attempt to understand what features of an economy determine the answers to the previous questions. We study a model in which the drop in the private demand for structures frees up ...