Karl Harmenberg
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View article: The Unemployment‐Risk Channel in Business‐Cycle Fluctuations
The Unemployment‐Risk Channel in Business‐Cycle Fluctuations Open
The unemployment‐risk channel (URC) amplifies an initial contraction through a reduction in consumption demand by workers who fear unemployment. Crucial for this are the dynamics of job separations and firm hiring. In US data, the job‐find…
View article: Integrated epi‐econ assessment: Quantitative theory
Integrated epi‐econ assessment: Quantitative theory Open
Aimed at pandemic preparedness, we construct a framework for integrated epi‐econ assessment that we believe would be useful for policymakers, especially at the early stages of a pandemic outbreak. We offer theory, calibration to micro‐, ma…
View article: Nordic Economic Policy Review 2024: Fiscal Policy in Uncertain Times
Nordic Economic Policy Review 2024: Fiscal Policy in Uncertain Times Open
This paper discusses recent research on the distribution of income and wealth as determinants of fiscal multipliers and the implications for economic policy in the Nordic countries. Economies with higher wealth inequality or lower income i…
View article: A simple theory of Pareto-distributed earnings
A simple theory of Pareto-distributed earnings Open
I introduce a simple model which endogenously generates a Pareto distribution in top earnings. Workers inhabit different niches, and the earnings of a worker is determined by the niche-specific supply of labor and a downward-sloping labor-…
View article: Macroeconomic Dynamics with Rigid Wage Contracts
Macroeconomic Dynamics with Rigid Wage Contracts Open
We adapt the wage contracting structure in Chari (1983) to a dynamic, balanced-growth setting with recontracting as in Calvo (1983). The resulting wage-rigidity framework dampens income effects in the short run, thus allowing significant r…
View article: Aggregating heterogeneous-agent models with permanent income shocks
Aggregating heterogeneous-agent models with permanent income shocks Open
I introduce a method for simulating aggregate dynamics of heterogeneous-agent models where log permanent income follows a random walk. The idea is to simulate the model using a counterfactual permanent-income-neutral measure which incorpor…
View article: Integrated Epi-Econ Assessment
Integrated Epi-Econ Assessment Open
We formulate an economic time use model and add to it an epidemiological SIR block.In the event of an epidemic, households shift their leisure time from activities with a high degree of social interaction to activities with less, and also …
View article: On Using Pareto Distributions for Measuring Top-Income Gender Disparities
On Using Pareto Distributions for Measuring Top-Income Gender Disparities Open
Atkinson et al. (2018) propose a measure of the glass ceiling exploiting that top incomes are approximately Pareto distributed. We clarify how this glass-ceiling coefficient describes the increasing scarcity of women further up in the inco…
View article: Consumption Dynamics under Time-Varying Unemployment Risk
Consumption Dynamics under Time-Varying Unemployment Risk Open
Private consumption demand falls in response to increased unemployment risk during a recession, as households increase their precautionary savings and postpone irreversible durable investments. The postponement effect is seven times as lar…
View article: Essays on Income Risk and Inequality
Essays on Income Risk and Inequality Open
Consumption Dynamics under Time-Varying Unemployment Risk We study the response of households' demand for durable goods to fluctuations in unemployment risk. First, using survey data, we document that household durable expenditures react s…