We argue that the vast bulk of movements in aggregate real economic activity during the
Great Recession were due to financial frictions. We reach this conclusion by looking through …

The new edition of a comprehensive treatment of monetary economics, including the first
extensive coverage of the effective lower bound on nominal interest rates. This textbook …

We develop and estimate a general equilibrium search and matching model that accounts
for key business cycle properties of macroeconomic aggregates, including labor market …

We construct a utility-based model of fluctuations with nominal rigidities and unemployment.
We first show that under a standard utility specification, productivity shocks have no effect on …

Over the past decade an increasing number of central banks and other policy institutions
have developed and estimated medium-scale New Keynesian DSGE models. 1 The …

Abstract The standard New Keynesian model with staggered wage setting is shown to imply
a simple dynamic relation between wage inflation and unemployment. Under some …

Unemployment is high when financial discounts are high. In recessions, the stock market
falls and all types of investment fall, including employers' investment in job creation. The …

We develop a New Keynesian model with search and matching frictions in the labor market.
We show that the model generates counterfactual labor market dynamics. In particular, it …

In order to explain the joint fluctuations of output, inflation and the labor market, this paper
develops and estimates a general equilibrium model that integrates a theory of equilibrium …

What accounts for the significant real effects of monetary policy shocks? And what accounts
for the persistent and hump shaped responses of output and inflation in response to such …