Eric R. Young

Learn More
This article describes the approach to computing the version of the stochastic growth model with idiosyncratic and aggregate risk that relies on collapsing the aggregate state space down to a small number of moments used to forecast future prices. One innovation relative to most of the literature is the use of a non-stochastic simulation routine. & 2009(More)
This paper studies monetary and macro-prudential policies in a simple model with both a nominal and a financial friction. The nominal friction gives rise to conventional monetary policy objectives emphasized in the New Keynesian literature. The financial friction, in the form of a collateral constraint that binds only occasionally, gives rise to the macro(More)
We study the extent to which unsecured credit markets have altered the transmission of increased income risk to consumption variability over the past several decades. We find that unsecured credit markets pass through increased income risk to consumption, irrespective of bankruptcy policy and the information possessed by lenders. If risk sharing has indeed(More)
Increased blood pressure is a leading risk for premature death and disability. The causes of increased blood pressure are intuitive and well known. However, the fundamental basis and means for improving blood pressure control are highly integrated into our complex societal structure both inside and outside our health system and hence require a comprehensive(More)
Stochastic general equilibrium models of small open economies with occasionally binding nancial frictions are capable of mimicking both the business cycles and the crisis events associated with the sudden stop in access to credit markets (Mendoza, 2010). This paper studies the inef ciencies associated with borrowing decisions in a two-sector small open(More)
Over the past three decades five striking features of aggregates in the unsecured credit market have been documented: (1) rising availability of credit along both the intensive and extensive margins, (2) rising debt accumulation, (3) rising bankruptcy rates and discharge in bankruptcy, (4) rising dispersion in interest rates across households, and (5) the(More)
This paper introduces the rational inattention hypothesis (RI) – that agents process information subject to finite channel constraints – into a stochastic growth model with permanent technology shocks. We find that RI raises consumption volatility relative to output by introducing an endogenous demand shock. Furthermore, it is shown that incorporating RI(More)
In the aftermath of the global financial crisis, a new policy paradigm has emerged in which old-fashioned policies such as capital controls and other government distortions have become part of the standard policy tool kit (so called macroprudential policies). On the wave of this seemingly unanimous policy consensus, a new strand of theoretical literature(More)