E3 - Prices, Business Fluctuations, and Cycles
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Financial Development and the Volatility of Income
This paper presents a general equilibrium model with endogenous collateral constraints to study the relationship between financial development and business cycle fluctuations in a cross-section of economies with different sizes of their financial sector. -
A General Equilibrium Model with Banks and Default on Loans
During the recent financial crisis in the U.S., banks reduced new business lending amidst concerns about borrowers’ ability to repay. At the same time, firms facing higher borrowing costs alongside a worsening economic outlook reduced investment. -
The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications
We study the cyclical properties of sales, regular price changes and average prices paid by consumers (“effective” prices) using data on prices and quantities sold for numerous retailers across many U.S. metropolitan areas.