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Preston, Bruce

Works: 2 works in 12 publications in 1 language and 44 library holdings
Classifications: HB1,
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Publications about Bruce Preston
Publications by Bruce Preston
Most widely held works by Bruce Preston
Labor supply heterogeneity and macroeconomic co-movement by Stefano Eusepi( file )
6 editions published in 2009 in English and held by 31 libraries worldwide
"Standard real-business-cycle models must rely on total factor productivity (TFP) shocks to explain the observed co-movement between consumption, investment and hours worked. This paper shows that a neoclassical model consistent with observed heterogeneity in labor supply and consumption, can generate co-movement in absence of TFP shocks. Intertemporal substitution of goods and leisure induces co-movement over the business cycle through heterogeneity in consumption behavior of employed and unemployed workers. The result is due to two model features that are introduced to capture important characteristics of US labor market data. First, individual consumption is affected by the number of hours worked with employed consuming more on average than unemployed. Second, changes in the employment rate, a central explanator of total hours variation, then affects aggregate consumption. Demand shocks --- such as shifts in the marginal efficiency of investment, government spending shocks and news shocks --- are shown to generate economic fluctuations consistent with observed business cycles"--National Bureau of Economic Research web site
Long-term debt pricing and monetary policy transmission under imperfect knowledge by Stefano Eusepi( Book )
6 editions published in 2012 in English and held by 13 libraries worldwide
Under rational expectations monetary policy is generally highly effective in stabilizing the economy. Aggregate demand management operates through the expectations hypothesis of the term structure -- anticipated movements in future short-term interest rates control current demand. This paper explores the effects of monetary policy under imperfect knowledge and incomplete markets. In this environment the expectations hypothesis of the yield curve need not hold, a situation called unanchored financial market expectations. Whether or not financial market expectations are anchored, private sector imperfect knowledge mitigates the efficacy of optimal monetary policy. Under anchored expectations, slow adjustment of interest-rate beliefs limits scope to adjust current interest-rate policy in response to evolving macroeconomic conditions. Imperfect knowledge represents an additional distortion confronting policy, leading to greater inflation and output volatility relative to rational expectations. Under unanchored expectations, current interest-rate policy is divorced from interest-rate expectations. This permits aggressive adjustment in current interest-rate policy to stabilize inflation and output. However, unanchored expectations are shown to raise significantly the probability of encountering the zero lower bound constraint on nominal interest rates. This constraint is more severe the longer is the average maturity structure of the public debt
English (12)
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