Abstract We build a New Keynesian business-cycle model with rich household
heterogeneity. A central feature is that matching frictions render labor-market risk …

The flow opportunity cost of moving from unemployment to employment consists of forgone
public benefits and the forgone consumption value of nonworking time. We construct a time …

Abstract We analyse a Bewley-Huggett-Aiyagari incomplete-markets model with labour-
market frictions. Consumers are subject to idiosyncratic employment shocks against which …

Labor Markets and Business Cycles integrates search and matching theory with the
neoclassical growth model to better understand labor market outcomes. Robert Shimer …

The interaction of incomplete markets and sticky nominal wages is shown to magnify
business cycles even though these two features—in isolation—dampen them. During …

I study unemployment insurance (UI) in general equilibrium with incomplete markets, search
frictions, and nominal rigidities. An increase in generosity raises the aggregate demand for …

Unemployed households' access to unsecured revolving credit more than tripled over the
last three decades. This article analyses how both cyclical fluctuations and trend increases …

We empirically establish that unemployed individuals maintain significant access to credit
and that upon a layoff, the unconstrained borrow while the constrained default and delever …

We study the macroeconomic effects of deregulating the goods and labor markets. To this
end, we introduce endogenous product creation and labor market frictions in an otherwise …

We construct, and then estimate by maximum likelihood, a tractable dynamic stochastic
general equilibrium model with incomplete insurance and heterogenous agents. The key …