The rate of job-to-job transitions is twice as large today as the rate at which workers move from employment to unemployment. I demonstrate that, under plausible specifications, the basic job-ladder model --- the workhorse model of the literature on on-the-job search --- has no chance of...

Labour markets in different regions or countries vary significantly with respect to turnover rates, remuneration practices, investment in general and firm-specific human capital, and the frequency of employee-driven start-ups. Examples include the Silicon Valley versus Route 128 in the US, and...

I construct a heterogeneous agents economy that mimics the time-series behavior of the US earnings distribution from 1963 to 2003. Agents face aggregate and idiosyncratic shocks and accumulate real and financial assets. I estimate the shocks driving the model using data on income inequality, on...

The paper sets out a monetary business cycle model extended to include the production of credit that serves as an alternative to money in transactions and is subject to productivity shocks. The model provides some improvement on certain puzzles, in particular by capturing the procyclic movements...

This paper introduces a form of boundedly-rational expectations into an otherwise standard New-Keynesian Phillips curve. The representative agent's forecast rule is optimal (in the sense of minimizing mean squared forecast errors), conditional on a perceived law of motion for inflation and...

How can a particular allocation and prices be implemented? Under what conditions does a policy deliver a unique competitive equilibrium? How many degrees of freedom there are in the determination of the policy variables, or how many are the instruments of policy? In this paper we analyze a...

The paper presents a model of fiscal and monetary policy that evaluates the tradeoff between higher distortionary labor taxation and higher inflation in the resolution of fiscal crises. In the model government debt is domestically held and nominal. Data are presented to show that such debt is...

This appendix details the derivation of a number of results reported in "The Equivalence of Wage and Price Staggering in Monetary Business Cycle Models," which appears in the Review of Economic Dynamics.

This paper addresses the output-price volatility puzzle by studying the interaction of optimal monetary policy and agents' beliefs. We assume that agents choose their information acquisition rate by minimizing a loss function that depends on expected forecast errors and information costs....