One often heard counter to the concern on rising income and wealth inequality is that it is wrong to focus on inequality of outcomes in a “snapshot.” Intergenerational mobility and “equality of opportunity”, so the argument goes, is what matters for normative evaluation. In response to...

An iconic model with high leverage and overvalued collateral assets is used to illustrate the amplification mechanism driving asset prices to ‘overshoot’ equilibrium when an asset bubble bursts - threatening widespread insolvency and what Richard Koo calls a ‘balance sheet recession’....

Implicit contract theory has been successful in explaining wage rigidity but not unemployment. We argue that the theory has paid insufficient attention to (i) the general equilibrium aspects and (ii) constraints limiting the set of feasible contracts. Implicit, as opposed to explicit contracts,...

In this article the authors explore, in a preliminary way, some of the effects of learning-by-doing on the structure, conduct and performance of an industry. Learning is seen as a decline in a firm's unit production cost as a consequence of an increase in its cumulative production experience....