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Working Paper
North-South business cycles
This paper shows that the economic activity of the industrial North and developing South move together - when the North is above its trend, the South tends to be above its trend. We refer to this phenomenon as the "North-South business cycle." The paper develops a quantitative general equilibrium model of North-South trade that captures many cyclical features of North-South trade and production data. In particular, the high volatility of North-South terms of trade, and strong comovement of Northern and Southern activity. On the basis of this model we argue that North-South business cycles ...
Working Paper
The effect of state fiscal reform on population heterogeneity
This paper tests whether state fiscal policy alters neighborhood income homogeneity. One implication of the Tiebout model is that within-community homogeneity declines as a result of an exogenous decrease in the ability of jurisdictions to set local tax and expenditure levels. The Property tax revolt and the school finance equalization reform of the 1970s and 1980s offer a test of the role of state fiscal reform on aggregate population sorting behavior. The results show that fiscal reform, especially tax and expenditure limitation laws and property tax reform, results in a small but ...
Working Paper
Market structure, technology and the cyclicality of output
Revision of Working Paper 91-19
Working Paper
Cyclical productivity in a model of labor hoarding
Working Paper
Monetary policy and the term structure of nominal interest rates: evidence and theory
This paper explores how exogenous impulses to monetary policy affect the yield curve for nominally risk-free bonds. We identify monetary policy shocks using three distinct variants of the identified VAR methodology. All three approaches imply similar patterns for the effect of monetary policy shocks on the term structure: A contractionary policy shock induces a pronounced positive but short-lived response in short term interest rates, with a smaller effect on medium-term rates and almost no effect on long term rates. Because of their transitory impact, monetary policy shocks account for a ...
Working Paper
A policymaker's guide to indicators of economic activity
Working Paper
The role of energy in real business cycle models