We study learning in perfect competition. A representative price-taking firm sells a good whose quality is unknown to some buyers. The uninformed buyers use the price to infer information about quality. Even though the firm is a price-taker, information is disseminated though the price. It is...

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...

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...