Working Paper
Mortgages as recursive contracts
Marquis, Milton H.; Krainer, John (2003)
Mortgages are one-sided contracts under which the borrower may terminate the contract at any time, while the lender must commit to honoring the terms of the contract throughout its life. There are two aspects to this feature of the contract that are modeled in this paper. The first is that the borrower may choose between buying a house or renting. Given these alternatives, a contract between a household and a lender makes home ownership feasible, and provides insurance to the household against fluctuating rental payments. The second is that once in a contract, the household may terminate the ...
Working Paper Series , Paper 2003-03

Journal Article
Mortgage refinancing
Marquis, Milton H.; Krainer, John (2003)
FRBSF Economic Letter

Journal Article
Inflation: the 2% solution
Marquis, Milton H. (2001)
FRBSF Economic Letter

Working Paper
On using relative prices to measure capital-specific technological progress
Marquis, Milton H.; Trehan, Bharat (2005)
Recently, Greenwood, Hercowitz and Krusell (GHK) have identified the relative price of (new) capital with capital-specific technological progress. In a two-sector growth model, however, the relative price of capital equals the ratio of the productivity processes in the two sectors. Restrictions from this model are used with data on wages and prices to construct measures of productivity growth and test the GHK identification, which is easily rejected by the data. This raises questions about various measures of the contribution that capital-specific technological progress might make to the ...
Working Paper Series , Paper 2005-02

Working Paper
Bank intermediation and persistent liquidity effects in the presence of a frictionless bond market
Einarsson, Tor; Marquis, Milton H. (2000)
An ?expansionary? monetary policy that increases the growth rate of bank reserves is generally believed by policy makers to induce a ?liquidity effect?, or a persistent decline in short-term nominal interest rates, that stimulates real activity. Christiano, et al. (1991,1995,1997) have incorporated this feature of the economy into equilibrium business cycle models by introducing a commercial bank that acquires deposits from households and channels those funds to firms, which use them to fund their working capital expenses. Bank deposits are the only interest-bearing financial asset available ...
Working Paper Series , Paper 2000-08

Working Paper
An RBC model with growth: the role of human capital
Einarsson, Tor; Marquis, Milton H. (1994)
Finance and Economics Discussion Series , Paper 94-33

Working Paper
Some implications of using prices to measure productivity in a two-sector growth model
Marquis, Milton H.; Trehan, Bharat (2003)
We construct a 2 sector growth model with sector specific technology shocks where one sector produces intermediate goods while the other produces final goods. Theoretical restrictions from this model are used to compute the time series for sector-specific TFPs based solely on factor prices and the relative price of intermediate goods to final goods over the 1959-2000 period. An aggregate TFP measure based on these series appears quite similar to the multifactor productivity measure constructed by the BLS. We find statistical evidence of structural breaks in the growth rate of our productivity ...
Working Paper Series , Paper 2001-10

Journal Article
Setting the interest rate
Marquis, Milton H. (2002)
FRBSF Economic Letter

Working Paper
Accounting for the secular “decline” of U.S. manufacturing
Marquis, Milton H.; Trehan, Bharat (2005)
The share of employment in manufacturing as well as the relative price of manufactures has declined sharply over the postwar period, while the share of manufacturing output relative to GDP has remained roughly constant. Household preferences turn out to play a key role in reconciling this behavior with a closed-economy, two-sector model with differential rates of productivity growth. We show that the data imply that households are not willing to substitute between the two goods at all and also that this inference is independent of whatever the income elasticity of demand for services might ...
Working Paper Series , Paper 2005-18

Journal Article
What's behind the low U.S. personal saving rate?
Marquis, Milton H. (2002)
FRBSF Economic Letter