There is a large literature, including work by Hall (1997), Chari, Kehoe, and McGrattan (2002), Gali, Gertler, and Lopez-Salido (2002), and many others that has studied the gap between the household's static marginal rate of substitution condition (MRS) between consumption and leisure and the...

This paper develops a general equilibrium model of world trade, based on the technology proposed by Eaton and Kortum. We study the existence and uniqueness of equilibrium. We propose and test an algorithm for calculating equilibria. We test the ability of a calibrated version of the model to...

Since it burst onto the scene of mainstream monetary economics, the New Neo-Classical Phillips Curve has been the focus of two important empirical debates. First, to what extent properly measured marginal costs affect inflation dynamics. Second, to what extent purely forward looking inflation...