Showing 1 - 10 of 11
In monetary unions, monetary policy is typically made by delegates of the member countries. This procedure raises the possibility of strategic delegation- that countries may choose the types of delegates to influence outcomes in their favor. We show that without commitment in monetary policy,...
Persistent link: https://www.econbiz.de/10010851374
We analyze a monetary model with flexible labor supply, cash-inadvance constraints and seigniorage-financed government deficits. If the intertemporal elasticity of substitution of labor is greater than one, there are two steady states, one determinate and the other indeterminate. If the...
Persistent link: https://www.econbiz.de/10010851434
We study the effects of nominal debt on the optimal sequential choice of monetary policy. When the stock of debt is nominal, the incentive to generate unanticipated inflation increases the cost of the outstanding debt even if no unanticipated inflation episodes occur in equilibrium. Without full...
Persistent link: https://www.econbiz.de/10010851438
We obtain a recursive formulation for a general class of contracting problems involving incentive constraints. These constraints make the corresponding maximization sup problems non-recursive. Our approach consists of studying a recursive Lagrangian. Under standard general conditions, there is a...
Persistent link: https://www.econbiz.de/10010851446
We study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts. Because of enforceability problems, contracts are constrained efficient.We show that limited enforceability amplifies the impact of technological innovations on aggregate output. More...
Persistent link: https://www.econbiz.de/10010547375
We study how barriers to business start-up affect the investment in knowledge capital when contracts are not enforceable. Barriers to business start-up lower the competition for knowledge capital and, in absence of commitment, reduce the incentive to accumulate knowledge. As a result, countries...
Persistent link: https://www.econbiz.de/10010547392
We study the interplay between competition and trust as efficiency- enhancing mechanisms in the private provision of money. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a...
Persistent link: https://www.econbiz.de/10010547409
We study the short- and long-run implications of offshoring on innovation, technology adoption, wage and income inequality in a Ricardian model with directed technical change. A unique final good is produced by combining a skilled and an unskilled product, each produced from a continuum of...
Persistent link: https://www.econbiz.de/10010950605
We analyze recent contributions to growth theory based on the model of expanding variety of Romer (1990). In the first part, we present different versions of the benchmark linear model with imperfect competition. These include the "lab equipment" model, "labor-for-intermediates" and "directed...
Persistent link: https://www.econbiz.de/10010547273
This paper presents a tractable dynamic general equilibrium model that can explain cross-country empirical regularities in geographical mobility, unemployment and labor market institutions. Rational agents vote over unemployment insurance (UI), taking the dynamic distortionary effects of...
Persistent link: https://www.econbiz.de/10010547410