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

  1. The Generalized Euler Equation and the Bankruptcy-Sovereign Default Problem. With Xavier Mateos-Planas, Sean McCrary and Adrien Wicht. This version, October 23. Abstract: [...]

  2. International Tax Competition with Rising Intangible Capital and Financial Globalization. With Vincenzo Quadrini. This version, October 30. Forthcoming JMoE. Abstract: [...]

  3. Commitment in the Canonical Sovereign Default Model With Xavier Mateos-Planas, Sean McCrary and Adrien Wicht. This version, March 23. Abstract: [...]

  4. A Protocol for Repeated Bargaining With Akihisa Kato. Economic Letters, Volume 227, June 2023, 111132. Abstract: [...]

  5. Procyclical Productivity in New Keynesian Models With Zhesheng Qiu (December 21). Abstract: [...]

  6. A Quantitative Theory of the Credit Score With Satyajit Chatterjee, Dean Corbae, and Kyle Dempsey (Jan 23) (First version 2004). Econometrica, Vol. 91, No. 5 (September, 2023), 1803–1840. Abstract: [...]

  7. Health versus Wealth: On the Distributional Effects of Controlling a Pandemic with Andrew Glover, Jonathan Heathcote, and Dirk Krueger. Forthcoming JMoE. This version, July 2023. (First Version March 2020). A previous version appeared in Covid Economics: Vetted and Real-Time Papers Issue 6, April 17, 2020, and as a Mpls Fed WP Abstract: [...]

  8. The Welfare Cost of Inflation Revisited: The Role of Financial Innovation and Household Heterogeneity with Shutao Cao, Cesaire A. Meh, and Yaz Terajima. Journal of Monetary Economics, Volume 118, March 2021, Pages 366-380. This version July 2019. Abstract: [...]

  9. Banking Dynamics, Market Discipline and Capital Regulations with Tamon Takamura, and Yaz Terajima. This version March July 2020. Abstract: [...]

  10. Partial Default with Cristina Arellano and Xavier Mateos-Planas, (This version July 2022). Forthcoming, Journal of Political Economy. Online Appendix. Abstract: [...]

  11. Sticky Wage Models and Labor Supply Constraints. with Zhen Huo. American Economic Journal: Macroeconomics 12, 3, 2020, (pp. 284-318). This Version May 2019. Abstract: [...]

  12. Demand Induced Fluctuations with Zhen Huo (This Version May 2020). Review of Economic Dynamics. 37, S99-S117. Cannibalized material from Paradox of Thrift Recessions. Abstract: [...]

  13. Labor Share and Productivity Dynamics with Se-Kyu Choi (August 2020). Forthcoming, Economic Journal. Abstract: [...]

  14. Institution Building without Commitment with Marco Bassetto and Zhen Huo. This Version August 2020. A previous version circulated as "Organizational Equilibrium with Capital". Abstract: [...]

  15. 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. Tables updated with up to 2019 SCF. Abstract: [...]

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

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

  18. Demand Shocks and Open Economy Puzzles. with Yan Bai (January 2015). American Economic Review Papers & Proceedings, 105, 5, 644-49 . Abstract: [...]

  19. Credit, Bankruptcy, and Aggregate Fluctuations. with Makoto Nakajima (November 2019, this version corrects many typos from October 2019). First presented in ESSIM 2004. Abstract: [...]

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

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

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

  23. 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.

  24. Living Arrangements and Labor Market Volatility of Young Workers with Sebastian Dyrda and Greg Kaplan (2019). Previously titled Business Cycles and Household Formation: The Micro vs the Macro Labor Elasticity February, 2012. Abstract: [...]

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

  26. Demand Shocks as Productivity Shocks with Yan Bai and Kjetil Storesletten September 2012. (This version September 2019). Online Appendix. Abstract: [...]

  27. Inter-generational Redistribution in the Great Recession with Andrew Glover, Jonathan Heathcote, and Dirk Krueger. Journal of Political Economy, 128, 10, 3730-3778. This version, January 2020, includes online appendix). These are additional Computer Files and Data File. Abstract: [...]

  28. 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: [...]

  29. 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: [...]

  30. 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: [...]

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

  32. Credit Lines with Xavier Mateos-Planas, Dec 2013, (First Version 2007). Abstract: [...]

  33. 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: [...]

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

  35. 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: [...]

  36. 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: [...]

  37. 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: [...]

  38. 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: [...]

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

  40. 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: [...]

  41. 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: [...]
  42. 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: [...]

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

  44. 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: [...]

  45. 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: [...]
  46. College Attainment of Women with Virginia Sanchez Marcos. (May 2002). Review of Economic Dynamics, Volume 5, Issue 4, Pages 965-998 (October 2002). Abstract: [...]
  47. Updated Facts on the U.S. Distributions of Earnings, Income and Wealth. with Santiago Budria, Javier Diaz-Gimenez, Vincenzo Quadrini. (Revised in August 2002). Federal Reserve Bank of Minneapolis Quarterly Review. Abstract: [...]

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

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

  50. 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: [...]

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

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

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

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

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

  56. 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: [...]

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

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

  59. 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: [...]

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

  61. 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: [...]

  62. Measuring Inequality: Facts on the Distribution of Earnings, Income and Wealth (with Javier Diaz-Gimenez and Vincenzo Quadrini). Federal Reserve Bank of Minneapolis Quarterly Review. Abstract: [...]

  63. Understanding the U.S. Wealth Distribution (Joint with Vincenzo Quadrini). Federal Reserve Bank of Minneapolis Quarterly Review. Abstract: [...]

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

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

  66. 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". Journal of International Economics. Abstract: [...]

  67. 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: [...]

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

  69. On the Quantitative Importance of Market Completeness. Journal of Monetary Economics. Abstract: [...]

  70. Politico-Economic Equilibrium and Growth (joint with Per Krusell and Vincenzo Quadrini). Journal of Economics Dynamics and Control. HAY VERSION EN CASTELLANO Equilibrio Politico-Economico y Crecimiento Economico. Abstract: [...]

  71. Politico-Economic Transition (joint with Per Krusell) (Version December 2001). Review of Economic Design. Abstract: [...]

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

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

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

  75. Vested Interests In a Positive Theory of Stagnation and Growth with Per Krusell. Review of Economic Studies. Abstract: [...]

  76. 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: [...]

  77. Are Consumption Taxes Really Better Than Income Taxes? with Per Krusell, and Vincenzo Quadrini. Journal of Monetary Economics 37 (1996). Abstract: [...]

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

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

  80. 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'', Investigaciones Economicas, Vol. X, 1986, 173-84. Abstract: [...]