This paper examines how supply-side policies may play a role in fighting a low aggregate demand that traps an economy at the zero lower bound (ZLB) of nominal interest rates. Future increases in productivity or reductions in mark-ups triggered by supply-side policies generate a wealth effect...

Societies socialize children about sex. This is done in the presence of peer-group effects, which may encourage undesirable behavior. Parents want the best for their children. Still, they weigh the marginal gains from socializing their children against its costs. Churches and states may...

This paper quantifies the costs of adhering to a fixed exchange rate arrangement, such as a currency union, for emerging economies. To this end it develops a dynamic stochastic disequilibrium model of a small open economy with downward nominal wage rigidity. In the model, a negative external...