• Publications
  • Influence
Noise Trader Risk in Financial Markets
We present a simple overlapping generations model of an asset market in which irrational noise traders with erroneous stochastic beliefs both affect prices and earn higher expected returns. The
Hysteresis and the European Unemployment Problem
European unemployment has been steadily increasing for the last fifteen years and is expected to remain very high for many years to come. In this paper, we argue that this fact implies that shocks
Positive Feedback Investment Strategies and Destabilizing Rational Speculation
Analyses of the role of rational speculators in financial markets usually presume that such investors dampen price fluctuations by trading against liquidity or noise traders. This conclusion does not
Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence
This note uses information on a sample of sixteen OECD countries to assess the relationship between central bank independence and macroeconomic performance. As previous work suggests, politically
This paper uses cross-sectional and longitudinal data to examine differences in pay for equally-skilled workers in different ind ustries. The major finding is that there is substantial dispersion in
Equipment Investment and Economic Growth
Using data from the United Nations Comparison Project and the Penn World Table, we find that machinery and equipment investment has a strong association with growth: over l9&)?l95 each percent of GDP
An aging society: opportunity or challenge?
The general conclusion is that demographic changes will improve American standards of living in the near future, but lower them slightly over the very long term.
Fiscal Policy in a Depressed Economy
In a depressed economy, with short-term nominal interest rates at their zero lower bound, ample cyclical unemployment, and excess capacity, increased government purchases would be neither offset by
Breach of Trust in Hostile Takeovers
The paper questions the common view that share price increases of firms involved in hostile takeovers measure efficiency gains from acquisitions. Even if such gains exist, most of the increase in the