The article clarifies the substantive aspects of emergence of stability in dynamics of development of economic entities. The condition of stability demonstration in economic processes through the measures of uncertainty and certainty is provided and proved. The tetralistic nature of stability as...

This paper develops a matching model à la Pissarides (2000) in order to explain the basic facts of housing markets, most of all the variance in house prices. Price dispersion is basically due to both the ex-ante heterogeneity of the parties and the search costs of buyers and sellers. In fact,...

I construct a dynamic stochastic general equilibrium (DSGE) model characterized by flexible prices, search frictions, and nominal wage contracts, and examine to what extent the model can explain the quantitative business cycle properties of real macroeconomic variables in the U.S. economy. I...

This paper depicts the negative impact of a falling labour share caused by reduced bargaining power of workers on aggregate demand and employment. Contrary to standard New Keynesian models, the presence of consumers not participating in financial markets (rule of thumb consumers) causes an...

This paper examines the role of the labour share in creating instability in a small open economy. We assume that financial markets are imperfect so that entrepreneurs are credit constrained, and that this constraint is tighter for low levels of financial development. Aghion, Bacchetta and...

The ‘wages breakout’ has been a recurring theme in the Australian public policy debate in recent years. Political conservatives, media commentators and some business groups have warned that Australian wages growth is unsustainable, or threatens to become unsustainable. This paper critically...