The delegation of monetary policy to a supranational Central Bank creates a conflict of interest between residents of different countries. For example, the country in recession favours more inflation to boost output, while the country in boom prefers exactly the opposite. This conflict gives...

This paper builds a dynamic general equilibrium macro-finance model with two types of borrowers: entrepreneurs who want to produce and gamblers who want to play a lottery. It links central bank's interest rate policy to expected cash flows of both types. This link enables us to study how the...

This paper examines transition dynamics in a search economy. We contrast two extreme cases: a completely unexpected reform and a fully anticipated reform. We view the former as a metaphor for a reform being announced and implemented with immediate effect, the latter as a metaphor for a reform...

The Paper considers the accuracy of traditional TFP growth estimates using an econometric methodology which takes account of scale economies, fixed factors of production and adjustment costs to reveal underlying ‘pure technological change’. The results suggest that these biases vary...

In this article, we estimate the structure of costs of hiring, terminating, and retiring employees in France using a representative sample of French establishments. The estimates are estimated using a panel data set for two years (1992 and 1996) that matches two sources: the Wage Structure...

We provide sufficient conditions in finite-horizon multi-stage games for the value function of each player, associated to extremal Markov perfect equilibria, to display strategic complementarities and for the contemporaneous equilibrium to be increasing in the state variables.

This paper investigates the extent to which expansion of international production by US multinationals reduces labour demand at home and at other foreign locations in the presence of labour adjustment costs. The adjustment-cost model of the firm is applied to estimate short-run and long-run...