When workers send applications to vacancies they create a network. Frictions arise because workers typically do not know where other workers apply to and firms do not know which candidates other firms consider. The first coordination friction affects network formation, while the second...

We consider a model where each individual (or ethnic minority) is embedded in a network of relation-ships and decides whether or not she wants to be assimilated to the majority norm. Each individual wants her behavior to agree with her personal ideal action or norm but also wants her behavior to...

This paper proposes a theoretical framework to analyze the impacts of credit and technology shocks on business cycle dynamics, where firms rely on banks and households for capital financing. Firms are identical ex ante but differ ex post due to different realizations of firm specific technology...