This paper examines the production aspect of money to bridge between the search-theoretic models and the canonical Walrasian growth models. In this paper, we argue that money can generate real effects via technology choice (high vs. low), we model explicitly the pattern of exchanges to explore...

We consider a general equilibrium model where monetary policy has redistributive effects. Agents have stochastic preferences and face random buying and selling opportunities. We show that the Friedman rule is just the second best policy. However, the Friedman rule is Pareto optimal. It requires...

In this paper, we consider a dynamic New Keynesian model of the small open economy in the light of bounded rationality. This entails private agents and the central bank updating their beliefs about the laws of motion of inflation, the output gap and real exchange rate when forming their optimal...

This paper uses the neoclassical growth model to identify the effects of technological change on the US business cycle. In the model there are two sources of technological change: neutral, which affects the production of all goods homogeneously, and investment-specific. Investment-specific...

This work introduces a rigorous set-theoretic foundation of bilateral matching mechanisms and studies their properties in a systematic manner. By providing a unified framework to study ilateral matching mechanisms, we formalize how different spatial/informational constraints can be implemented...

Self regulation is a mechanism of quality vigilance that is frequently used in credence good industries. The providers in these markets generally form a Self Regulated Organization (SRO), composed by some members of the industry, whose main job is to convince consumers through an active...

We solve in closed form the optimal consumption / portfolio choice problem for the class of isoelastic utility functions under incomplete information about the mean return of the stock price. Our approach consists in converting the original investor's problem into an equivalent program where the...

Many people are fired from their jobs for poor performance. However, it is difficult to distinguish whether they are fired because they are not well suited for their job (sorting explanation) or because the firms are trying to provide incentives for effort (incentive explanation). This paper...

This paper presents a micro-model of knowledge creation and transfer in a small group of people. It is intended to contribute eventually to the development of microfoundations for aggregate models of knowledge externalities used in various literatures, such as those pertaining to endogenous...

We introduce and solve a new class of static portfolio choice problems, where only the best realized alternative matters. A decision maker must simultaneously choose among independent ranked options, and the better alternatives have a lower chance of panning out. Each choice is costly, and just...