Central to ongoing debates over the desirability of monetary unions is a supposed trade-off, outlined by <xref ref-type="bibr" rid="R22">Mundell (1961)</xref>: a monetary union reduces transactions costs but renders stabilization policy less effective. If shocks across countries are sufficiently correlated, then, according to this...

This paper investigates the design of trade policies in an uncertain world. Governments in two countries select between direct quantity controls and subsidies in an attempt to shift profits in favor of domestic, imperfectly competitive firms. The equilibrium of this policy game depends on the...

This paper characterizes the monetary equilibria of an economy with commodity and labor contracts. If government policy is not "too variable," there may exist an equilibrium with predetermined wages and prices. In this equilibrium, observed changes in the money supply to finance government...

The possibility of sunspot equilibria and endogenous cycles are explored in a two-sector overlapping-generations model with entry. It is shown that if prospective entrants act oligopolistically as producers but competitively as consumers, then a strategic complementarity between the entry...

Central to ongoing debates over the desirability of monetary unions is a supposed trade-off, outlined by Mundell (1961): a monetary union reduces transactions costs but renders stabilization policy less effective. If shocks across countries are sufficiently correlated, then, according to this...