Researchers have incorporated labor or credit market frictions in isolation within simple neoclassical models to open up a role for institutions, inject realism into their models and examine the impact of these distortions on output and employment. We present an overlapping generations model...

This paper explores implications of nominal rigidity characterized by a non-constanthazard function for aggregate dynamics. I derive the NKPC under an arbitrary hazardfunction and parameterize it with the Weibull duration model. The resulting Phillips curveinvolves lagged inflation and lagged...

The link between measured risk aversion and the decision to become an entrepreneur iswell established, but the link between risk preferences and entrepreneurial success is not.Standard theoretical models of occupational choice under uncertainty imply a positivecorrelation between an...

This paper reviews and synthesizes the theory of information economics and empiricalevidence on how information changes the behavior of consumers, households and firms. I show thatconsumers respond to new information in food experiments but perhaps not in retirement accountmanagement. Some...

For the first 13 years after entry, the hazard rate for firm exits is persistently higher forurban than rural firms. While differences in observed industry market, local marketand firm attributes explain some of the rural-urban gap in firm survival, rural firmsretain a survival advantage 25%...

We use a static framework characterized by both moral hazard and holdup problems. In the model the optimal allocation of bargaining power balances these frictions. We examine the impact of improved monitoring on that optimal allocation and its impact upon effort, investment, profits and rents....

We examine the coexistence of banks and financial markets, studyinga credit market where the qualities of investment projects are notobservable and the investment decisions of entrepreneurs are not contractible...

This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and economic cycles and examines its interaction with monetary policy. The framework used is a dynamic stochastic general equilibrium model with banks and bank capital, in which...