How important is monopolistic competition to an understanding of the effects of aggregate demand on output? The authors ask this question at three levels. Can monopolistic competition, by itself, explain why aggregate demand affects output? Can it, together with other imperfections, generate...

The essential function of money is its role as a medium of exchange. The authors formalize this idea using a search-theoretic equilibrium model of the exchange process that captures the "double coincidence of wants problem" with pure barter. One advantage of the framework described here is that...

The authors argue that long-term debt has a role in controlling management's ability to finance future investments. Companies with high (widely held) debt will find it hard to raise capital, since new security-holders will have low priority relative to existing creditors; conversely for...