We develop a multi-agent model of the education production function where investments of students, parents, and teachers are linked to the presence of minorities in the classroom. We then test the key implications of this model using rich survey data and a mandate to randomly assign students to...

Policy rules that are consistent with inflation targeting are examined in a small macroeconomic model of the US economy. We compare the properties and outcomes of explicit instrument rules' as well as targeting rules.' The latter, which imply implicit instrument rules, may be closer to actual...