Can the structure of asset markets change the way monetary policy should be conducted? Following a linear-quadratic approach, the present paper addresses this question in a New Keynesian small open economy framework. Our results reveal that the configuration of asset markets significantly...

Competing intermediaries search on behalf of consumers among a large number of horizontally differentiated sellers. Consumers either pick the best deal offered by a random intermediary, or compare the intermediaries. A higher number of deal finders has the direct effect of decreasing their...

This paper provides a novel rationale for the regulation of market size when heterogeneous firms compete. A regulator seeks to maximize total welfare by choosing the number of firms allowed to enter the market, e.g. by issuing a certain number of licenses. Opening up the market for more firms...