Browsing by Author "Eichenbaum, Martin"

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    Capital Utilization and Returns to Scale
    (1995) Burnside, A Craig; Eichenbaum, Martin; Rebelo, Sergio T
    This paper studies the implications of procyclical capital utilization rates for inference regarding cyclical movements in labor productivity and the degree of returns to scale. We organize our investigation around five questions that we study using a measure of capital services based on electricity consumption: (1) Is the phenomenon of near or actual short-run increasing returns to labor an artifact of the failure to accurately measure capital utilization rates? (2) Can we find a significant role for capital services in aggregate and industry-level production technologies? (3) Is there evidence against the hypothesis of constant returns to scale? (4) Can we reject the notion that the residuals in our estimated production functions represent technology shocks? (5) How does correcting for cyclical variations in capital services affect the statistical properties of estimated aggregate technology shocks? The answer to the first two questions is yes. The answer to the third and fourth questions is no. The answer to the fifth question is "a lot."
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    Government guarantees and self-fulfilling speculative attacks
    (Journal of Economic Theory, 2004-11-01) Eichenbaum, Martin; Rebelo, Sergio
    We develop a model in which government guarantees to banks' foreign creditors are a root cause of self-fulfilling twin banking-currency crises. Absent guarantees, such crises are not possible. In the presence of guarantees banks borrow foreign currency, lend domestic currency and do not hedge the resulting exchange rate risk. With guarantees, banks will also renege on their foreign debts and declare bankruptcy when a devaluation occurs. We assume that the government is unable or unwilling to fully fund the resulting bailout via an explicit fiscal reform. These features of our model imply that government guarantees lead to self-fulfilling banking-currency crises. © 2003 Elsevier Inc. All rights reserved.
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    Prospective Deficits and the Asian Currency Crisis
    (Journal of Political Economy, 2001-12) Eichenbaum, Martin; Rebelo, Sergio
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    Understanding the Forward Premium Puzzle: A Microstructure Approach
    (American Economic Journal: Macroeconomics, 2009-07) Burnside, Craig; Eichenbaum, Martin; Rebelo, Sergio