New Research
Guvenen, Mataloni Jr, Rassier, Ruhl: Offshore Profit Shifting and Domestic Productivity Measurement
Official statistics display a significant slowdown in U.S. aggregate productivity growth that begins in 2004. We show how offshore profit shifting by U.S. multinational enterprises affects GDP and, thus, productivity measurement.
read morePrescott and Wessel: Money in the Production Function
Businesses hold large quantities of cash reserves, which have average returns well below their investments in tangible capital. Businesses do this because these monetary assets provide services.
read moreSong, Price, Guvenen, Bloom, von Wachter: Firming Up Inequality
We use a massive, matched employer-employee database for the United States to analyze the contribution of firms to the rise in earnings inequality from 1978 to 2013. We find that one-third of the rise in the variance of (log) earnings occurred within firms, whereas two-thirds of the rise occurred between firms.
read moreKarabarbounis and Neiman: Accounting for Factorless Income
Comparing U.S. GDP to the sum of measured payments to labor and imputed rental payments to capital results in a large and volatile residual or “factorless income”.
read moreKehoe, Pujolàs, Rossbach: Improving the Analysis of Trade Policy
The standard model that economists use to analyze the impact of trade reforms systematically underpredicts changes in trade patterns. It not only underestimates overall trade magnitudes, but also fails to predict which industries experience the largest trade increases.
read moreLuttmer: Slow Convergence in Economies with Organization Capital
This paper describes a range of circumstances in which this implies aggregate convergence rates that are only about half of what they are in the standard Cass-Koopmans economy. Through the lens of the models described in this paper, the aftermath of the Great Recession of 2008 is unsurprising if the events of late 2008 and early 2009 are interpreted as a destruction of organization capital.
read moreCavallo, Del Negro, Frame, Grasing, Malin, Rosa: Fiscal Implications of the Federal Reserve’s Balance Sheet Normalization
The paper surveys the recent literature on the fiscal implications of central bank balance sheets, with a special focus on political economy issues.
read moreBoerma, Karabarbounis: Inferring Inequality with Home Production
We revisit the causes, welfare consequences, and policy implications of the dispersion in households’ labor market outcomes using a model with uninsurable risk, incomplete asset markets, and a home production technology
read moreBhandari, McGrattan: Sweat Equity in U.S. Private Business
This paper uses theory disciplined by U.S. national accounts and business census data to measure private business sweat equity, which is the value of time to build customer bases, client lists, and other intangible assets.
read moreChari, Nicolini, Teles: Ramsey Taxation in the Global Economy
We study cooperative optimal Ramsey equilibria in the open economy addressing classic policy questions: Should restrictions be placed to free trade and capital mobility?
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