The Return to Capital and the Business Cycle (2007)
Gomme, Paul, Ravikumar, B, Rupert, Peter
We measure the return to capital directly from the NIPA and BEA data and examine the return implications of the real business cycle model. We construct a quarterly time series of the after-tax return...
Home Production Meets Time-to-Build (2000)
Paul Gomme, Finn Kydl, Peter Rupert
An innovation in this paper is to introduce a time-to-build technology for the production of market capital into a model with home production. Our main finding is that the two anomalies that have...
Unemployment and Economic Welfare (1999)
David Andolfatto, Paul Gomme, Busch Gordon Myers
this paper is concerned with developing a simple theoretical framework that might be used to interpret the labor market behavior described above; this interpretive device is then used to determine...
Evolutionary Programming as a Solution Technique for the Bellman Equation (1998)
: Evolutionary programming is a stochastic optimization procedure which has proved useful in optimizing difficult functions. It is shown that evolutionary programing can be used to solve the Bellman...
Monetary Policy Regimes and Beliefs (1998)
Recent monetary history has been characterized by monetary authorities that appear to shift periodically between distinct policy regimes associated with higher or lower average rates of money...
Optimal Taxation in an Endogenous Growth Model with Government Supplied Educational Capital (1998)
Government expenditures are large when measured as a proportion of government spending or relative to GNP. This fact is incorporated into an endogenous growth model in which education produces new...
Anticipated Inflation in a Neoclassical Growth Model with a Cashin -advance Constraint (1998)
Sufficient conditions for the long run non-superneutrality of money are established in a neoclassical growth model with a labor-leisure choice. In the basic model, money is held to satisfy a cia{}...
Evolutionary Programming as a Solution Technique for the Bellman Equation (1970)
: Evolutionary programming is a stochastic optimization procedure which has proved useful in optimizing difficult functions. It is shown that evolutionary programing can be used to solve the Bellman...
US Labour Market Policy and the Canada-US Unemployment Rate Gap
David Andolfattio, Paul Gomme, Paul A. Storer
In this paper, we investigate the extent to which changes in US labour market policy in the 1980s may have contributed to the emergence of an unemployment rate gap between Canada and the United...
Shirking, Unemployment and Aggregate Fluctuations.
Empirically, real wages exhibit relatively little cyclical variation and a weak cyclical pattern. Early real business cycle (RBC) models predict, to the contrary, large, procyclical real wage...
Home Production Meets Time to Build
Paul Gomme, Finn E. Kydland, Peter Rupert
An innovation in this paper is to introduce a time-to-build technology for the production of market capital into a model with home production. Our main finding is that the two anomalies that have...
Major League Baseball Commissioner Bud Selig announced he would crack down on steroid use in baseball, hoping to stop players from doping. He was forced to discipline stars like Rafael Palmeiro,...
The return to capital and the business cycle
Paul Gomme, B. Ravikumar, Peter Rupert
Real business cycle models have difficulty replicating the volatility of S&P 500 returns. This fact should not be surprising since real business cycle theory suggests that the return to capital...
The Return to Capital and the Business Cycle
Paul Gomme, B Ravikumar, Peter Rupert
We measure the return to capital directly from the NIPA and BEA data and examine the return implications of the real business cycle model. We construct a quarterly time series of the after-tax return...
What labor market theory tells us about the "New Economy"
An investigation of whether economic theory supports the claim that a technology shock can change the "natural rate of unemployment."
Unemployment and economic welfare
Statistics that measure labor market activity are often interpreted as measures of economic performance and social well being. This article demonstrates that such interpretations are not justified in...
Monetary Policy Regimes and Beliefs
This article investigates the role of beliefs over monetary policy in propagating the effects of monetary policy shocks within the context of a dynamic, stochastic general equilibrium model. In our...
Canada's money targeting experiment
An inquiry into why the Bank of Canada was unable to bridle the inflation of the 1970s by controlling money growth.
The relationship between the unemployment rate and the nonaccelerating inflation rate of unemployment (NAIRU) is presumed to be an inflationary bellwether, but recent inflation predictions based on...
The FOMC has two objectives: maximizing sustainable economic growth and maintaining price stability. At times-like the past year-these goals appear to be in conflict. This Commentary outlines some...
Free trade and tariffs—an uneasy mix
When U.S. steel corporations began declaring bankruptcy and laying off thousands of workers, tariffs on foreign steel seemed a reasonable way of preventing further damage to the industry. But why do...
In 1998, University of Iowa faculty members created their own futures markets. These experimental markets, designed to provide insights into the behavior of traders and naturally occurring markets,...
Per capita income growth and disparity in the United States, 1929–2003
Economic theory says the average income of different regions should grow closer over time. Within the United States and across some of the richer countries, evidence suggests this is true.
Why policymakers might care about stock market bubbles
This Commentary makes a case for Fed action in the event of a stock market bubble. Because stock market prices serve as a signal to business managers to invest, bubbles can mislead managers into...
Accounting for the jobless recoveries
Much has been made of the so-called jobless recovery of the past two business cycles—that is, their atypically weak employment growth early in the expansion phase. This Commentary examines the...
Results in Lucas (1987) suggest that if public policy can affect the growth rate of the economy, the welfare implications of alternative policies will be large. In this paper, a stochastic, dynamic...
On the cyclical allocation of risk
A real business cycle model with heterogeneous agents is parameterized, calibrated, and simulated to see if it can account for some stylized facts characterizing postwar U.S. business cycle...
Monetary policy regimes and beliefs
Recent monetary history has been characterized by monetary authorities that appear to shift periodically between distinct policy regimes associated with higher or lower average rates of money...
Evolutionary programming as a solution technique for the Bellman equation
Evolutionary programming is a stochastic optimization procedure that has proved useful in optimizing difficult functions. This paper shows that evolutionary programming can be used to solve the...
Home production meets time-to-build
Paul Gomme, Finn Kydland, Peter Rupert
An innovation in this paper is to introduce a time-to-build technology for the production of market capital into a model with home production. The paper’s main finding is that the two anomalies...
Monetary policy regimes and beliefs
Revised. This paper investigates the role of beliefs over monetary policy in propagating the effects of monetary policy shocks within the context of a dynamic, stochastic general equilibrium model....
The business cycle and the life cycle
Paul Gomme, Richard Rogerson, Peter Rupert, Randall Wright
The paper documents how cyclical fluctuations in market work vary over the life cycle and then assesses the predictions of a life-cycle version of the growth model for those observations. The...
Theory, measurement, and calibration of macroeconomic models
Calibration has become a standard tool of macroeconomics. This paper extends and refines the calibration methodology along several important dimensions. First, accounting for home production is...
Evaluating the macroeconomic effects of a temporary investment tax credit
As part of a fiscal stimulus package, some members of Congress have recently proposed a temporary investment subsidy. This paper uses the neoclassical growth model to evaluate the likely...
Measuring labor’s share of income
Recent Bureau of Labor Statistics (BLS) data show labor’s share of income at a historic low. This Policy Discussion Paper explores the BLS calculations with an eye to understanding the factors...
The Return to Capital and the Business Cycle
Paul Gomme, B. Ravikumar, Peter Rupert
Real business cycle models have difficulty replicating the volatility of S&P 500 returns. This fact should not be surprising since the RBC theory suggests a measurement of the return of aggregate...
Monetary Policy Regimes and Beliefs
Recent monetary history has been characterized by monetary authorities that appear to shift periodically between distinct policy regimes associated with higher or lower average rates of money...