We survey samples of German firms and households to document novel stylized facts about the extent of information frictions among the two groups. First, firms' expectations about macroeconomic variables are closer to expert forecasts and less dispersed than households', consistent with higher...

Is there a role for debt beyond curing overaccumulation of capital? Does dynamic efficiency and the infeasibility of debt Ponzi schemes eliminate any Pareto-improving role for a government in a competitive economy with complete markets? Is there an optimal maturity structure of public debt?...

It is often argued that a mandatory minimum wage is binding only if the wage density displays a spike at it. In this paper we analyze a model with search frictions and heterogeneous production technologies, in which imposition of a minimum wage affects wages even though, after imposition, the...

In this article, a modelling framework for the information transmission between agents in an evolutionary game setting is proposed. Agents observe traits which reflect past and present behaviour and success of other agents. If agents imitate more successful agents based on these traits, the...

We consider an economy in which firms need to invest in capital before they can advertise a job, while applicants may have to compete for jobs. Our aim is to investigate how this competition affects the investment decisions of firms. Our first result shows that the economy always generates the...

It is commonly observed that over time and across societies, women tend to marry older men. The traditional explanation for this phenomenon is that wages increase with age and hence older men are more attractive in the marriage market. This explanation, however, involves an implicit assumption...

In this paper we conduct an analysis of the effects of firing costs in models that consider simultaneously worker heterogeneity, imperfect information on their productivity and union power. We consider an OLG model where heterogeneous workers participate in the labour market both when young and...

The aim of this paper is to provide a new mechanism for the spatial mismatch hypothesis. Spatial mismatch can here be the result of optimizing behavior on the part of the labor market participants. In particular, the unemployed can choose low amounts of search and long-term unemployment if they...

This paper presents several economic models that explore the relationships between imperfect information, racial income disparities, and segregation. The use of race as a signal arises here, as in models of statistical discrimination, from imperfect information about the return to transactions...