Current Research (A lot of this material was developed under NSF grants number SBR-9309514, SES-9110991, 0079504, and 0351451.

  1. The Welfare Cost of Inflation Revisited: The Role of Financial Innovation and Household Heterogeneity with Shutao Cao, Cesaire A. Meh, and Yaz Terajima. This version July 2019. Abstract: [...]

  2. Partial Default with Cristina Arellano and Xavier Mateos-Planas, (July 2019). Abstract: [...]

  3. Sticky Wage Models and Labor Supply Constraints. with Zhen Huo (This Version May 2019). Abstract: [...]

  4. Labor Share and Productivity Dynamics with Se-Kyu Choi (February 2019). Abstract: [...]

  5. Organizational Equilibrium with Capital with Marco Bassetto and Zhen Huo (This Version December 2018). Abstract: [...]

  6. 2013 Update on the U.S. Earnings, Income, and Wealth Distributional Facts: A View from Macroeconomics. with Moritz Kuhn. FEDERAL RESERVE BANK OF MINNEAPOLIS QUARTERLY REVIEW April 2016. Abstract: [...]

  7. Financial Frictions, Asset Prices, and the Great Recession with Zhen Huo (February 2016). Abstract: [...]

  8. The Great Recession and Financial Shocks. with Zhen Huo (November 2015). This is a short piece for the Mpls Fed. Abstract: [...]

  9. Demand Shocks and Open Economy Puzzles. with Yan Bai (January 2015). AER P&P (2015). Abstract: [...]

  10. Credit, Bankruptcy, and Aggregate Fluctuations. with Makoto Nakajima (October 2014). Presented for the first time in ESSIM 2004. Abstract: [...]

  11. Tightening Financial Frictions on Households, Recessions, and Price Reallocations with Zhen Huo. Review of Economic Dynamics Volume 18, Issue 1, January 2015, Pages 118-139. Abstract: [...]

  12. Inequality in Macroeconomics Chapter 15 of the NH Handbook of Income Distribution, volume 2B A.B. Atkinson and F.J. Bourguignon (Eds.) With Vincenzo Quadrini. This version July 2014. Abstract: [...]

  13. A Realistic Neoclassical Multiplier with Zhen Huo. Prepared for a Mpls Fed EPP. August, 2013. Abstract: [...]

  14. Heterogeneity in Expected Longevities with Josep Pijoan. "Demography," Volume 51, Issue 6, December 2014, pp. 2075-2102. Abstract: [...] A light description of the work for VoxEU is here also published here in The Region from the Mpls Fed.

  15. Business Cycles and Household Formation: The Micro vs the Macro Labor Elasticity with Sebastian Dyrda and Greg Kaplan. February, 2012. Abstract: [...]

  16. Models of Government Expenditure Multipliers. with Sebastian Dyrda. February, 2012. Abstract: [...]

  17. Demand Shocks as Productivity Shocks with Yan Bai and Kjetil Storesletten September 2012. (This version May 2017). Online Appendix. Abstract: [...]

  18. Inter-generational Redistribution in the Great Recession with Andrew Glover, Jonathan Heathcote, and Dirk Krueger (This version March 2019). (Online Appendix) Abstract: [...]

  19. Facts on the Distributions of Earnings, Income, and Wealth in the United States: 2007 Update with Javier Diaz-Gimenez, and Andy Glover. Federal Reserve Bank of Minneapolis Quarterly Review, February 2011, Vol. 34 No. 1. Abstract: [...]

  20. Methods versus Substance: Measuring the Effects of Technology Shocks on Hours with Frank Schorfheide, Cristina Fuentes-Albero, Maxym Kryshko, and Raul Santaeulalia-Llopis. This version April 2012. Online Appendix Abstract: [...]

  21. Aggregate and Welfare Effects of Redistribution of Wealth Under Inflation and Price-Level Targeting with Cesaire A. Meh and Yaz Terajima (April 2010). Journal of Monetary Economics (2010) Volume 57, pp. 637-652. Appendix. Abstract: [...]

  22. Understanding the Dynamics of Labor Share: The Role of Noncompetitive Factor Prices with Se-Kyu Choi. June 2008. Abstract: [...]

  23. Credit Scoring and the Competitive Pricing of Default Risk With Satyajit Chatterjee and Dean Corbae, (August 2009). Abstract: [...]

  24. Credit Lines with Xavier Mateos-Planas (Dec 2007). Abstract: [...]

  25. On the Welfare Implications of Financial Globalization without Financial Development With Enrique Mendoza and Vincenzo Quadrini. NBER International Seminar on Macroeconomics (ISOM), annual, Septemeber 2007. Abstract: [...]

  26. Redistributive Shocks and Productivity Shocks with Raul Santaeulalia-Llopis Journal of Monetary Economics (2010) Volume 57, pp. 931-948. Abstract: [...]

  27. Financial Integration, Financial Development and Global Imbalances with Enrique G. Mendoza and Vincenzo Quadrini. Journal of Political Economy, (2009) Volume 117, 3, 371-410. Abstract: [...]

  28. A Finite-Life Private-Information Theory of Unsecured Consumer Debt with Satyajit Chatterjee and Dean Corbae. Journal of Economic Theory, (2008), 1422, 149-177. Abstract: [...]

  29. An Aggregate Economy with Different Size Houses with Virginia Sanchez-Marcos, Papers and Proceedings of the Journal of the European Economic Association, April-May 2008, Vol. 6, No. 2-3, Pages 705-714. Abstract: [...]

  30. Social Security, Life Insurance and Annuities for Families with Jay Hong, Journal of Monetary Economics, Volume 54/1, 118-140 (2007) (Carnegie-Rochester Proceedings). Abstract: [...]

  31. Life Insurance and Household Consumption with Jay Hong, (This version January 2012, forthcoming AER (short paper)). Appendix not for publication Abstract: [...]

  32. Constrained Efficiency in the Neoclassical Growth Model with Uninsurable Idiosyncratic Shocks with Julio Davila, Jay Hong and Per Krusell, forthcoming Econometrica, (July 2005, this version April 2012) Abstract: [...]

  33. On the The Living Arrangements of Elderly Widows with Carlos Bethencourt. International Economic Review, Vol. 50, Issue 3, pp. 773-801, August 2009. (Version January 2008). Abstract: [...]

  34. Time-Consistent Public Policy with Paul Klein and Per Krusell (This version September 2007). Review of Economic Studies, (2008) Volume 75, No. 3, 789-808. Click here for additional material(codes, alternative approximations and various plots) and here for a description of the material. Abstract: [...]

  35. Families as Shocks with Luis Cubeddu. Journal of the European Economic Association Volume 1, Issue 2-3, 671-682 (April/May 2003). Abstract: [...]

  36. Default and Aggregate Fluctuations in Storage Economies. with Makoto Nakajima (July 2002). Chapter 7, Frontiers In Applied General Equilibrium Modeling, pp. 127-150, 2005 Cambridge University Press, "Essays in Honor of Herbert Scarf". Abstract: [...]

  37. The Success and Failure of Reforms in Transition Economies. with Stephen Parente. (This Version, June 2004). Journal of Money Credit and Banking, Vol 37. 1 23-42 (February 2005). Abstract: [...]

  38. College Attainment of Women with Virginia Sanchez Marcos. (May 2002). Review of Economic Dynamics, Volume 5, Issue 4, Pages 965-998 (October 2002). Abstract: [...]

  39. Updated Facts on the U.S. Distributions of Earnings, Income and Wealth. with Santiago Budria, Javier Diaz-Gimenez, Vincenzo Quadrini. (Revised in August 2002). QR. Abstract: [...]

  40. Desigualdad, ¿Qué sabemos? (In Spanish). Investigaciones Economicas. Vol. XXVI (2), 2002, 221-254. Abstract: [...]

  41. The Research Agenda: On the Determinants of Inequality (Electronic Supplement to RED, Vol 3, Issue 1, Nov 2001). Abstract: [...]

  42. A Quantitative Theory of Unsecured Consumer Credit with Risk of Default with Satyajit Chatterjee, Dean Corbae, and Makoto Nakajima. Version, December 2006. Econometrica}, Vol. 75, No. 6 (November, 2007), 1525-1589. Abstract: [...]

  43. Optimal time-consistent taxation with international mobility of capital with Paul Klein and Vincenzo Quadrini. (June 2005). Abstract: [...]

  44. What Accounts for the Increase in the Number of Single Households? with Ferdinando Regalia and Jacob Short. (Feb. 2019). Abstract: [...]

  45. Implementing the 35 Hour Workweek by Means of Overtime Taxation with Victoria Osuna. (This version March 2002). Abstract: [...]

  46. Precautionary Savings and Wealth Distribution under Habit Formation Preferences with Antonia Diaz and Josep Pijoan-Mas. (Aug 2003). JMoE. Abstract: [...]

  47. On the Equilibrium Concept for Overlapping Generations Organizations with Edward C. Prescott. Jan 2004 Version. Abstract: [...]

  48. Consumption Smoothing and Extended Families joint with Orazio Attanasio. This is the invited lecture that Orazio Attanasio presented in the 2000 World Congress in Seattle. Dec 2000 version. Abstract: [...]

  49. Time-Consistent Optimal Fiscal Policy joint with Paul Klein. (Version September 2002). Abstract: [...]

  50. Population Changes and Capital Accumulation: The Aging of the Baby Boom. Version of February 2001. BJEM. Abstract: [...]

  51. Accounting for Earnings and Wealth Inequality August 2002 version. With Ana Casta~neda and Javier Diaz-Gimenez. JPE. Abstract: [...]

    There is also an older version of the paper that assessed the implications of a change of taxes. Earnings and Wealth Inequality and Income Taxation: Quantifying the Trade-Off's of Switching to a Proportional Income Tax in the U.S. Abstract: [...]

  52. Consumption Smoothing in Island Economies: Can Public Insurance Reduce Welfare. with Orazio Attanasio. EER. There is also a pdf version. Abstract: [...]

  53. On the Size of the U.S. Government: Political Economy in the Neoclassical Growth Model. There are four graphs that go with it. Figure 1 Figure 2 Figure 3 Figure 4 (4/5/99 version) with Per Krusell. AER. Abstract: [...]

  54. Measuring Inequality: Facts on the Distribution of Earnings, Income and Wealth (with Javier Diaz-Gimenez and Vincenzo Quadrini). QR. Abstract: [...]

  55. Understanding the U.S. Wealth Distribution (Joint with Vincenzo Quadrini). QR. Abstract: [...]

  56. Marital Risk and Capital Accumulation (with Luis Cubeddu). (6/18/97 pdf version.) Abstract: [...]

  57. Computation of Equilibria in Heterogeneous Agent Economies Abstract: [...]

  58. The Balance of Payments and Borrowing Constraints: An Alternative View of Recent Events in Mexico (with Andy Atkeson). Formerly titled "How Mexico Lost Its Foreign Exchange Reserves". JIE. Abstract: [...]

  59. Capital-Skill Complementarity and Inequality. (joint with Per Krusell, Lee Ohanian, and Giovanni L. Violante, version of July 97). Econometrica. You can download the data we used for this paper as an ASCII file. Abstract: [...]

  60. Simulation-Based Estimation of a Nonlinear, Latent Factor AggregateProduction Function. (joint with Per Krusell, Lee Ohanian, and Giovanni L. Violante). Abstract: [...]

  61. On the Quantitative Importance of Market Completeness. JME. Abstract: [...]

  62. Politico-Economic Equilibrium and Growth (joint with Per Krusell and Vincenzo Quadrini). JEDC. HAY VERSION EN CASTELLANO Equilibrio Politico-Economico y Crecimiento Economico. Abstract: [...]

  63. Politico-Economic Transition (joint with Per Krusell) (Version December 2001). REDesign. Abstract: [...]

  64. Heterogeneous Agents Economies. Abstract: [...]

  65. Life-Cycle Economies and Aggregate Fluctuations. REStud. Abstract: [...]

  66. On the Existence, Uniqueness, and Computability of Non-Optimal Recursive Equilibria in Linear Quadratic Economies. with Sebastian Ceria. Abstract: [...]

  67. Vested Interests In a Positive Theory of Stagnation and Growth with Per Krusell. REStud. Abstract: [...]

  68. Exploring the Income Distribuion Business Cycle Dynamics (6/19/97) (previously titled Unemployment Spells, Cyclically Moving Factor Shares and Income Distribution Dynamics) with Ana Casta~neda and Javier Diaz-Gimenez. JME. Abstract: [...]

  69. Are Consumption Taxes Really Better Than Income Taxes? with Per Krusell, and Vincenzo Quadrini. JME. Abstract: [...]

  70. Working in the Market, Working at Home, and the Acquisition of Skills: a General Equilibrium Approach. American Economic Review, 83, (1993), 893-907. Abstract: [...]

  71. Classical Competitive Analysis of Economies With Islands, (with Ed Prescott), Journal of Economic Theory, Volume 57, July 1992, 73-98. Abstract: [...]

  72. Effects of Public Participative Credits on Firms'', (with Gonzalo Mato), published under the title ``Efectos de los Creditos Participativos en la Financiacion de las Empresas'', {\em Investigaciones Economicas}, Vol. X, 1986, 173-84. Abstract: [...]