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Author:Campbell, Jeffrey R. 

Journal Article
Interest rates following financial re-regulation

This article uses a calibrated general-equilibrium model of lending from the wealthy to the middle class to evaluate the effects of tightening household lending standards. The authors simulate a rise in down payment and amortization rates from their average values in the late 1990s and early 2000s to levels more typical of the era before the financial deregulation of the early 1980s. Their results show a drop in loan demand. This substantially lowers interest rates for an extended period. Counterintuitively, tightening lending standards makes borrowers better off.
Economic Perspectives , Volume 34 , Issue Q I , Pages 2-13

Working Paper
Last-in first-out oligopoly dynamics

This paper extends the static analysis of oligopoly structure into an infinite- horizon setting with sunk costs and demand uncertainty. The observation that exit rates decline with firm age motivates the assumption of last-in first- out dynamics: An entrant expects to produce no longer than any incumbent. This selects an essentially unique Markov-perfect equilibrium. With mild restrictions on the demand shocks, a sequence of thresholds describes firms? equilibrium entry and survival decisions. Bresnahan and Reiss?s (1993) empirical analysis of oligopolists? entry and exit assumes that such ...
Working Paper Series , Paper WP-06-28

Journal Article
Understanding aggregate job flows

The authors describe how evidence on aggregate job flows challenges standard business cycle theory and discuss recent developments in business cycle theory aimed at accounting for the evidence.
Economic Perspectives , Volume 21 , Issue Sep

Working Paper
Aggregate employment fluctuations with microeconomic asymmetries

We provide a simple explanation for the observation that the variance of job destruction is greater than the variance of job creation. In our model profit maximization in the presence of proportional plant-level costs of job creation and destruction implies that shrinking plants are more sensitive than growing plants to aggregate shocks. We describe circumstances in which this microeconomic asymmetry is preserved in the aggregate and show that it can account for asymmetries in the variability of job creation and destruction of the kind observed in the U.S. manufacturing sector. This is so ...
Working Paper Series, Macroeconomic Issues , Paper WP-96-17

Working Paper
Technical change, diffusion, and productivity

Working Paper Series, Macroeconomic Issues , Paper 93-16

Working Paper
Macroeconomic effects of employment reallocation

Major shifts in employment between industries and between firms within industries usually accompany recessions. Although this observation suggests that exogenous changes in the optimal allocation of labor are an important source of aggregate employment fluctuations, the macroeconomic significance of such shocks has remained unknown. This paper empirically assesses the role of reallocation shocks for cyclical employment fluctuations, and investigates the relationship between inter- and intrasectoral employment flows. In an analysis of total employment and the share employed in manufacturing, ...
Working Paper Series, Macroeconomic Issues , Paper WP-96-11

Journal Article
Measuring and analyzing aggregate fluctuations: the importance of building from microeconomic evidence - commentary

Review , Issue May , Pages 83-86

Working Paper
Open Mouth Operations

We examine the standard New Keynesian economy?s Ramsey problem written in terms of instrument settings instead of allocations. Its standard formulation makes two instruments available: the path of current and future interest rates, and an ?open mouth operation? which selects one of the many equilibria consistent with the chosen interest rates. Removing the open mouth operation by imposing a finite commitment horizon yields pathological policy advice that relies on the model's forward guidance puzzle.
Working Paper Series , Paper WP-2018-3

Journal Article
How the U.S. economy resembles a (very) big business

This article presents basic tools for measuring different business lines? contributions to the U.S. economy?s business cycles, and it applies these to measure the exposure of a large conglomerate to macroeconomic risks.
Economic Perspectives , Volume 32 , Issue Q III , Pages 29-46

Working Paper
Very Simple Markov-Perfect Industry Dynamics

This paper develops an econometric model of industry dynamics for concentrated markets that can be estimated very quickly from market-level panel data on the number of producers and consumers using a nested fixed-point algorithm. We show that the model has an essentially unique symmetric Markov-perfect equilibrium that can be calculated from the fixed points of a finite sequence of low-dimensional contraction mappings. Our nested fixed point procedure extends Rust's (1987) to account for the observable implications of mixed strategies on survival. We illustrate the model's empirical ...
Working Paper Series , Paper WP-2013-20


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