How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the...

This paper develops an alternative approach to the widely used Difference-In-Difference (DID) method for evaluating the effects of policy changes. In contrast to the standard approach, we introduce a nonlinear model that permits changes over time in the effect of unobservables (e.g., there may...

This paper studies alternative empirical strategies for estimating the effects of organization design practices on performance, as well as the factors which determine organizational design, in a cross-section of firms. Our economic model is based on a firm where multiple organizational design...