Paul Levine

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Reconciling Jaimovich-Rebelo Preferences, Habit in Consumption and Labor Supply

Staff Working Paper 2018-26 Tom D. Holden, Paul Levine, Jonathan M. Swarbrick
This note studies a form of a utility function of consumption with habit and leisure that (a) is compatible with long-run balanced growth, (b) hits a steady-state observed target for hours worked and (c) is consistent with micro-econometric evidence for the inter-temporal elasticity of substitution and the Frisch elasticity of labor supply.

Credit Crunches from Occasionally Binding Bank Borrowing Constraints

Staff Working Paper 2017-57 Tom D. Holden, Paul Levine, Jonathan M. Swarbrick
We present a model in which banks and other financial intermediaries face both occasionally binding borrowing constraints and costs of equity issuance. Near the steady state, these intermediaries can raise equity finance at no cost through retained earnings.

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