Creator: Altig, David, 1956-, Christiano, Lawrence J., Eichenbaum, Martin S., and Lindé, Jesper Series: Joint commitee on business and financial analysis Abstract:
We report estimates of the dynamic effects of a technology shock, and then use these to estimate the parameters of a dynamic general equilibrium model with money. We find: (i) a positive technology shock drives up hours worked, consumption, investment and output; (ii) the positive response of hours worked reflects that the Fed has in practice accommodated technology shocks; (iii) model parameter values and functional forms that match the response of macroeconomic variables to monetary policy shocks also work well for technology shocks; (iv) while technology shocks account for a large fraction of the lower frequency component of economic fluctuations, they account for only a small part of the business cycle component of fluctuations.
Preliminary and incomplete
Keyword: Consumption, General equilibrium model, Shocks, Fluctuations, and Technology Subject (JEL): D58 - General equilibrium and disequilibrium - Computable and other applied general equilibrium models and E32 - Prices, business fluctuations, and cycles - Business fluctuations ; Cycles
Creator: Diaz, Antonia and Luengo-Prado, Maria José, 1972- Series: Advances in dynamic economics Abstract:
In most developed countries, housing receives preferential tax treatment relative to other assets. In particular (i) the housing services provided by owner-occupied housing (generally referred to as imputed rents) are untaxed and (ii) mortgage interest payments reduce taxable income. The potential economic distortions resulting from the unique treatment of housing may be substantial, especially in light of the fact that residential capital accounts for more than half of the assets in the U.S. In particular, this tax treatment distorts the households' portfolio composition, their saving rates and their tenure choice. In this paper we build a general equilibrium model populated by heterogeneous agents subject to idiosyncratic risk. We use this framework to quantitatively assess the macroeconomic and distributional distortions introduced by this preferential tax treatment. We also study the effects of alternative tax schemes which could correct the current system's bias.
Subject (JEL): D58 - General equilibrium and disequilibrium - Computable and other applied general equilibrium models, H20 - Taxation, subsidies and revenue - General, and D31 - Distribution - Personal income, wealth, and their distributions
Creator: Reinert, Kenneth A. and Shiells, Clinton R. Series: Modeling North American economic integration Abstract:
Elasticities of substitutions between U.S. imports from Mexico, Canada, the rest of the world, and competing domestic production are estimated for 128 mining and manufacturing sectors, based on quarterly data for 1980-88. Results will be useful for subsequent computable general equilibrium (CGE) model simulations of North American trade, including the proposed free trade area between Mexico and the United States.
Subject (JEL): D58 - General equilibrium and disequilibrium - Computable and other applied general equilibrium models and F15 - Economic Integration