Modern trade models attribute the dispersion of international prices to physical and man-made barriers to trade, to the pricing-to-market by heterogeneous producers and to differences in the quality of output offered by firms. This paper presents a general equilibrium model that incorporates all...

This paper examines a new strategy for evaluating whether the size of a new environmental regulation requires that benefit cost analyses consider general equilibrium effects. Size in the context refers to both the magnitude and distribution of cost increases across sectors and the benefits...

We explore the consequences of treating the multiple, non-market benefits associated with improvements in ecosystem health and the market economy from which damage to these ecosystems stems as an integrated system. We find that willingness to pay measures of use-based ecosystem services are...

This paper formulates and estimates an open-economy overlapping generation general-equilibrium model of endogenous heterogeneous human capital in the form of schooling and on-the-job training. Physical capital accumulation is also analyzed. We use the model to explain rising wage inequality in...

We model the decisions of a multi-product firm that faces a fixed "menu" cost: once it is paid, the firm can adjust the price of all its products. We characterize analytically the steady state firm's decisions in terms of the structural parameters: the variability of the flexible prices, the...