Nonconvex factor adjustments in equilibrium business cycle models: do nonlinearities matter?

Article Abstract:

The aggregate nonlinearities that arise from the introduction of nonconvex capital adjustment costs in an equilibrium business cycle model are examined. It was found that when the sole source of cyclical fluctuation is changed in total factor productivity, and wages and interest rates are held constant, the lumpy investment model showed nonlinearities in aggregate investment demand that dampened recessions without adjustment costs.

United States, Models, Business cycles, Equilibrium (Economics)

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Growth and risk-sharing with private information

Article Abstract:

The effect of incomplete risk-sharing is examined for welfare and economic growth effects. Productivity shocks of households involve private information.

Risk (Economics)

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Unemployment insurance and precautionary saving

Article Abstract:

Precautionary saving models for households are examined in detail. The effect of unemployment insurance programs in the US is also assessed.

Savings, Unemployment insurance

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