We analyze a general equilibrium model with search frictions and differentiated commodities. Because of the many differentiated commodities, barter is difficult because it requires a double coincidence of wants, and this provides a medium of exchange role for fiat money. We prove the existence...

We extend the analysis of Kiyotaki and Wright, who study an economy in which the different commodities that serve as media of exchange are determined endogenously. Kiyotaki and Wright consider only symmetric, steady-state, pure-strategy equilibria, and find that for some parameter values no such...

We develop a model of gross job and worker flows and use it to study how the wages, permanent incomes, and employment status of individual workers evolve over time. Our model helps explain various features of labor markets, such as the amount of worker turnover in excess of job reallocation, the...

One critical aspect of economic development is that productivity growth and a rising standard of living are realized through more roundabout methods of production and increasing specialization of intermediate inputs and producer services. We use an extended version of the Judd-Grossman-Helpman...

A pairwise random matching game is considered to identify the social environments that give rise to the social custom and fashion cycles. The game, played by Conformists and Nonconformists, can generate a variety of socially stable behavior patterns. In the path-dependence case, Conformists set...

In recent years, monopolistic competition models have frequently been applied in macroeconomics, international and interregional economics, and economic growth and development. In this paper, I present a highly selective review in this area, with special emphasis on the complementarity and its...