model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to …

We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …

This paper presents a new approach to the theory of the firm by identifying factor complementarities as central to the … tradeoff between the gains froom these complementarities and transactions costs. In so doing, we must abandon the standard …