La transformación de la política y la investigación macroeconómica (2005)
Lo que les voy a describir es una revolución en la macroeconomía, una transformación en la metodología que ha cambiado la forma en la que realizamos nuestra ciencia. Antes de la transformación,...
Federal Reserve Bank of Minneapolis Research Department Staff Report 312 (2002)
This paper reviews the role of micro non-convexities in the study of business cycles. One important nonconvexity arises because an individual can work only one workweek length in a given week. The...
Some Observations on the Great Depression (2001)
The Great Depression in the United States was largely the result of changes in economic institutions that lowered the normal or steady-state market hours per person over 16. The difference in...
The 1990s in Japan: A Lost Decade (2001)
Fumio Hayashi, Edward C. Prescott, Sami Alp, Pedro Amaral, Igor Livshits
This paper offers a new explanation for the chronic slump: Japan in the 1990s was in a transition to a new and lower steady state growth path. The transition occurred because the growth rate of the...
Capacity Constraints, Asymmetries, and the Business Cycle (2000)
Gary D. Hansen, Edward C. Prescott
this paper, we study how aggregate fluctuations in a one-sector growth model with occasionally binding capacity constraints differ from fluctuations if the capacity constraints never bind. In the...
Lotteries, Sunspots, and Incentive Constraints (2000)
Timothy J. Kehoe, David K. Levine, Edward C. Prescott
: We study a prototypical class of exchange economies with private information and indivisibilities. We establish an equivalence between lottery equilibria and sunspot equilibria and show that the...
Adaptive decision rules for macro economic planning /--by Edward C. Prescott. (1967)
Microfilm of typescript. Pittsburgh, Pa. : Microfilm Corporation of Pennsylvania, [1976?]. -- 1 reel ; 35 mm.
Dynamic coalitions, growth, and the firm
Edward C. Prescott, John H. Boyd
The implications of a dynamic coalition production technology are explored. With this technology, coalitions produce the current period consumption good as well as coalition-specific capital which is...
Theory ahead of business cycle measurement
Recent developments in business cycle theory are reviewed. The principal finding is that the growth model, which was developed to account for the secular patterns in important economic aggregates,...
V.V. Chari, Patrick J. Kehoe, Edward C. Prescott
Economic policy ; Monetary policy
The firm and the plant in general equilibrium theory
Andreas Hornstein, Edward C. Prescott
The general equilibrium formulations are developed for two important economic environments. The first environment is the Lucas managerial span-of-control theory of the firm. It is shown that, in the...
The econometrics of the general equilibrium approach to business cycles
Finn E. Kydland, Edward C. Prescott
The founding fathers of the Econometric Society defined econometrics to be quantitative economic theory. A vision of theirs was the use of econometrics to provide quantitative answers to business...
Seigniorage as a tax: a quantitative evaluation
Ayse Imrohoroglu, Edward C. Prescott
In this paper we analyze the efficacy of seignorage as a tax associated with various monetary arrangements in a computable general equilibrium model. For the economies examined, we find that...
Technology adoption and growth
Stephen L. Parente, Edward C. Prescott
Technology change is modeled as the result of decisions of individuals and groups of individuals to adopt more advanced technologies. The structure is calibrated to the U.S. and postwar Japan growth...
Liquidity constraints in economies with aggregate fluctuations: a quantitative exploration
Javier Diaz-Gimenez, Edward C. Prescott
Liquidity (Economics)
Banking in computable general equilibrium economies
Javier Diaz-Gimenez, Edward C. Prescott, Terry Fitzgerald, Fernando Alvarez
In this paper we develop a computable general equilibrium economy that models the banking sector explicitly. Banks intermediate between households and between the household sector and the government...
Valuation equilibria with clubs
Harold L. Cole, Edward C. Prescott
This paper considers model worlds in which there is a continuum of individuals who form finite-sized associations to undertake joint activities. We show how, through a suitable choice of commodity...
The computational experiment: an econometric tool
Finn E. Kydland, Edward C. Prescott
An economic experiment consists of the act of placing people in an environment desired by the experimenter, who then records the time paths of their economic behavior. Performing experiments that use...
Executable program for "Time to Build and Aggregate Fluctuations"
Finn E. Kydland, Edward C. Prescott
This is a student version of the program used for Finn Kydland and Edward Prescott, "Time to Build and Aggregate Fluctuations", Econometrica, vol. 50, pp. 1345-1370, Nov. 1982 Some parameter values...
The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy
Fumio Hayashi, Edward C. Prescott
The question we address in this paper is why the Japanese miracle didn't take place until after World War II. For much of the pre-WWII period, Japan's real GNP per worker was not much more than a...
Web interface for "Time to Build and Aggregate Fluctuations"
Finn E. Kydland, Edward C. Prescott
This is a student version of the program used for Finn Kydland and Edward Prescott, "Time to Build and Aggregate Fluctuations", Econometrica, vol. 50, pp. 1345-1370, Nov. 1982 Some parameter values...
Barriers to Technology Adoption and Development.
Parente, Stephen L, Prescott, Edward C
The authors propose a theory of economic development in which technology adoption and barriers to such adoptions are the focus. The size of these barriers differs across countries and time. The...
ON EQUILIBRIUM FOR OVERLAPPING GENERATIONS ORGANIZATIONS *
Necessary conditions for equilibrium are that beliefs about the behavior of other agents are rational and individuals maximize. We argue that in stationary OLG environments this implies that any...
Why do Americans Work so Much More than Europeans?
Americans now work 50 percent more than do the Germans, French, and Italians. This was not the case in the early 1970s when the Western Europeans worked more than Americans. In this paper, I examine...
Capacity constraints, asymmetries, and the business cycle
Gary D. Hansen, Edward C. Prescott
We study how an occasionally binding capacity constraint affects the properties of business cycles. A real business cycle model is constructed where production takes place at individual plants and...
Business cycles: real facts and a monetary myth
Finn E. Kydland, Edward C. Prescott
This paper argues that the reporting of facts in light of theory fosters the development of theory. Dynamic neoclassical macro theory guided the selection of facts to report. The hope is that these...
Evaluating the welfare effects of alternative monetary arrangements
Ayse Imrohoroglu, Edward C. Prescott
The welfare effects of alternative monetary arrangements are computed for an economy calibrated to U.S. data. In the model world, people vary their holdings of liquid assets in order to smooth their...
Changes in the wealth of nations
Stephen L. Parente, Edward C. Prescott
This study systematically examines the distribution of the wealth of nations and how it has evolved over time. A nation's wealth is measured by its real per-capita gross domestic product. The study...
Is the stock market overvalued?
Ellen R. McGrattan, Edward C. Prescott
The value of U.S. corporate equity in the first half of 2000 was close to 1.8 times U.S. gross national product (GNP). Some stock market analysts have argued that the market is overvalued at this...
Why do Americans work so much more than Europeans?
Americans now work 50 percent more than do the Germans, French, and Italians. This was not the case in the early 1970s, when the Western Europeans worked more than Americans. This article examines...
A Unified Theory of the Evolution of International Income Levels
Parente, Stephen L., Prescott, Edward C., Philippe Aghion, Steven Durlauf
This chapter develops a theory of the evolution of international income levels. In particular, it augments the Hansen-Prescott theory of economic development with the Parente-Prescott theory of...
The equity premium in retrospect
Mehra, Rajnish, Prescott, Edward C., G.M. Constantinides, M. Harris, R. M. Stulz
This paper is a critical review of the literature on the "equity premium puzzle[equal, rising dots]. The puzzle, as originally articulated more than fifteen years ago, underscored the inability of...
Openness, technology capital, and development
Ellen R. McGrattan, Edward C. Prescott
A framework is developed with what we call technology capital. A country is a measure of locations. Absent policy constraints, a firm owning a unit of technology capital can produce the composite...
Nobel Lecture: The Transformation of Macroeconomic Policy and Research
A medical treatment is said to have placebo effects if patients who are optimistic about the treatment respond better to the treatment. This paper proposes a simple test for placebo effects. Instead...
Technology capital and the U.S. current account
Ellen R. McGrattan, Edward C. Prescott
The rate of return on capital of U.S. foreign subsidiaries has been much higher than the rate of return on capital of U.S. affliates of foreign companies. Over the period 1982–2005, the U.S. Bureau...
EconomicDynamics Interviews Timothy Kehoe and Edward Prescott on Great Depressions
Timothy Kehoe, Edward C. Prescott
Timothy Kehoe is the Distinguished McKnight University Professor at the University of Minnesota and Adviser of the Federal Reserve Bank of Minneapolis. Edward Prescott is the W. P. Carey Chaired...
Lifetime aggregate labor supply with endogenous workweek length
Edward C. Prescott, Richard Rogerson, Johanna Wallenius
This paper studies lifetime aggregate labor supply with endogenous workweek length. Such a theory is needed to evaluate various government policies. A key feature of our model is a nonlinear mapping...
The transformation of macroeconomic policy and research
2004 Annual Report Essay: Nobel Lecture by Edward C. Prescott
Effects of alternative monetary stabilization policies: an unexpected finding
Econometric models ; Fiscal policy ; Monetary policy
Cyclical movements of the labor input and its implicit real wage
Finn E. Kydland, Edward C. Prescott
An examination of whether a different specification for labor input and real wages leads to a reconsideration of labor force volatility during business cycles.
Some observations on the Great Depression
The Great Depression in the United States was largely the result of changes in economic institutions that lowered the normal or steady-state market hours per person over 16. The difference in...
THE 1929 STOCK MARKET: IRVING FISHER WAS RIGHT
Ellen R. McGrattan, Edward C. Prescott
Many stock market analysts think that in 1929, at the time of the crash, stocks were overvalued. Irving Fisher argued just before the crash that fundamentals were strong and the stock market was...
The Econometrics of the General Equilibrium Approach to Business Cycles.
Kydland, Finn E, Prescott, Edward C
The founding fathers of the Econometric Society defined econometrics to be quantitative economic theory. A vision of theirs was the use of econometrics to provide quantitative answers to business...
Robert M. Solow's Neoclassical Growth Model: An Influential Contribution to Economics.
This survey of Robert M. Solow's neoclassical growth model contains a brief description of the model and answers to questions of why this model is an important advance for economics. It is shown that...
Banking in computable general equilibrium economies
Diaz-Gimenez, Javier, Prescott, Edward C., Fitzgerald, Terry, Alvarez, Fernando
Interview with the 2004 Laureates in Economics, Finn E. Kydland and Edward C. Prescott
Kydland, Finn E., Prescott, Edward C.
Interview with the 2004 Laureates in Economics, Finn E. Kydland and Edward C. Prescott, December 11, 2004. Interviewers are Professor Karl-Gustaf Lofgren and Johanna Astrom, post graduate student,...
I was born on December 26, 1940, in Glens Falls, New York, to Mathilde Helwig Prescott and William Clyde Prescott. My mother's parents were German immigrants. My mother was forced to drop out of high...
The Transformation of Macroeconomic Policy and Research
Nobel Prize Lecture December 8, 2004
Intermediated quantities and returns
Rajnish Mehra, Facundo Piguillem, Edward C. Prescott
A large amount of intermediated borrowing and lending takes place between households. The average difference in these rates is over 2 percent. In this paper, we develop a model economy that displays...
Technology capital and the U.S. current account
Ellen R. McGrattan, Edward C. Prescott
The U.S. Bureau of Economic Analysis (BEA) estimates the return on investments of foreign subsidiaries of U.S. multinational companies over the period 1982?2006 averaged 9.4 percent annually after...
Technology capital and the U.S. current account (appendices)
Ellen R. McGrattan, Edward C. Prescott
Appendix A provides details for the computation of our model?s equilibrium paths, the construction of model national and international accounts, and the sensitivity of our main findings to...
On the needed quantity of government debt
Kathryn Birkeland, Edward C. Prescott
People are enjoying longer retirement periods, and population growth is slowing and, in some countries, falling. In this article, we determine the implications of these demographic changes for the...
Unmeasured investment and the 1990s U.S. hours boom
Ellen R. McGrattan, Edward C. Prescott
The basic neoclassical growth model accounts well for the postwar cyclical behavior of the U.S. economy prior to the 1990s, provided that variations in population growth, depreciation rates, total...
Great Depressions of the Twentieth Century
Timothy J. Kehoe, Edward C. Prescott
The papers in this volume study nine depressions - both from the interwar period in Europe and America and from more recent times and Latin America - using a common framework. All of the papers rely...
The 1990s in Japan: A Lost Decade
Fumio Hayashi, Edward C. Prescott
This paper examines the Japanese economy in the 1990s, a decade of economic stagnation. We find that the problem is not a breakdown of the financial system, as corporations large and small were able...
Openness, technology capital, and development
Ellen R. McGrattan, Edward C. Prescott
In this paper, we extend the growth model to include firm-specific technology capital and use it to assess the gains from opening to foreign direct investment. A firm?s technology capital is its...
Unmeasured investment and the puzzling U.S. boom in the 1990s (technical appendix)
Ellen R. McGrattan, Edward C. Prescott
Productivity ; Economic conditions
Intermediated quantities and returns
Rajnish Mehra, Facundo Piguillem, Edward C. Prescott
There is a large amount of intermediated borrowing and lending between households. Some of it is intergenerational, but most is between older households. The average difference in borrowing and...
Organizations in Economic Analysis.
John H. Boyd, Edward C. Prescott, Bruce D. Smith
Three economic environments are reviewed and, in each, organizations play an essential role. For an adve rse selection insurance economy, the authors find that when mutual in surance arrangements are...
Great depressions of the twentieth century
Timothy J. Kehoe, Edward C. Prescott ()
The worldwide Great Depression of the 1930s was a watershed for both economic thought and economic policymaking. It led to the belief that market economies are inherently unstable and to the...
Insurance Contracts as Commodities: A Note.
Hornstein, Andreas, Prescott, Edward C
This paper extends recent developments in general-equilibrium theory and applies them to the problem of measuring the real output of an economy's insurance sector. These developments permit a priced...
Taxes, Regulations, and the Value of U.S. and U.K. Corporations
Ellen R. McGrattan, Edward C. Prescott
We derive the quantitative implications of growth theory for U.S. corporate equity plus net debt over the period 1960-2001. There were large secular movements in corporate equity values relative to...
Stochastic Monotonicity and Stationary Distributions for Dynamic Economies.
Hopenhayn, Hugo A, Prescott, Edward C
The existence and stability of invariant distributions for stochastically monotone processes is studied. The Knaster-Tarski fixed point theorem is applied to establish existence of fixed points of...
Monopoly Rights: A Barrier to Riches
Stephen L. Parente, Edward C. Prescott
Our thesis is that poor countries are poor because they employ arrangements for which the equilibrium outcomes are characterized by inferior technologies being used, and being used inefficiently. In...
The Computational Experiment: An Econometric Tool.
Kydland, Finn E, Prescott, Edward C
An economic experiment places people in an environment desired by the experimenter, who then records the time paths of their economic behavior. Performing experiments using actual people at the level...
Needed: A Theory of Total Factor Productivity.
This paper evaluates the argument that differences in physical and intangible capital can account for the large international income differences that characterize the world economy today. The finding...