There is a widespread belief that changes in expectations may be an important independent
driver of economic fluctuations. The news view of business cycles offers a formalization of …

Capital reallocation is procyclical, despite measured productive reallocative opportunities
being acyclical or even countercyclical. This article reviews the advances in the literature …

This study investigates the influence of economic policy uncertainty on total factor
productivity (TFP) of enterprises. We find that economic policy uncertainty is significantly and …

The key ideas for adding financial market frictions in general equilibrium models are not new
in macroeconomics. However, it is only with the recent crisis that the profession has fully …

An equilibrium model of financial crises driven by Irving Fisher's financial amplification
mechanism features a pecuniary externality, because private agents do not internalize how …

Should a central bank deviate from its price stability objective to promote financial stability?
We study this question through the lens of a textbook New Keynesian model augmented …

Because firms invest heavily in R&D, software, brands, and other intangible assets—at a
rate close to that of tangible assets—changes in GDP, which does not include all intangible …

We estimate real losses arising from the cross‐sectional misallocation of financial liabilities.
Extending a production‐based framework of misallocation measurement to the liabilities …

This paper studies the business-cycle dynamics of secondary markets for physical capital
and their effects on the macroeconomy. In the data, both capital reallocation and the price of …

We develop a general equilibrium model to analyze the interaction between two sectors with
differing degree of financial friction in the context of liquidity injections (credit expansion). We …