This paper considers the implications of population mobility for risk sharing among individuals and among regions of a federation. There is an important interaction between risk sharing and interregional redistribution which precludes the regional authorities from fully exploiting gains from...

We suggest a simple variant of Uzawa preferences which has the same predictions as his formulation, but is less prone to criticism. We assume that the rate of time preference is an increasing function of the total value of current financial assets. It is shown that an increase in the rate of...

This paper studies the effects of monetary policies on employment, capital accumulation, consumption, and the term structure of interestrates in a cash-in-advance economy, where money is required for consumption expenditures. Monetary policy involves targeting the inflation rate or the nominal...

A model in which consumption exhibits durability, and habits develop over the flow of services provided by them is used to study current account dynamics. Durability leads to adjacent substitutability in consumption, while habits are assumed to lead to adjacent complementarity. The adjustment of...

This paper considers risk sharing among individuals within and across regions in a federation with population mobility and infinite horizons. It is shown that the regional authorities will not fully exploit gains from inter-regional risk sharing when population mobility is imperfect. However, in...

The fiscal externality model is extended to an infinite horizon setting with stochastic technologies. With imperfect population mobility some gains from risk sharing are not exploited by the regional authorities. Nevertheless, regional authorities who care about their reputation may be able to...

The implications of different cash in advance (CIA) constraints for open economies are worked out. If CIA constraints are only for consumption expenditures, changes in the rate of growth of money will have no steady state effects. If all transactions, even those involving bonds, are subject to...

It is shown that, in contrast to models with fixed labour, a change in monetary policy involving an increase in the inflation rate would have the same qualitative effects on steady state capital, consumption, and employment, regardless of whether only consumption or both consumption and...

The effects of exchange rate policies are examined for a small open economy in an infinite horizon model with investment, labor/leisure choice, and cash-in-advance for consumption. An increase in the rate of depreciation of the domestic currency reduces consumption and labor supply, as the...

Some recent empirical findings are used to motivate employing a model in which consumption exhibits durability, and habits develop over the flow of services provided by them, in order to study the effects of tariff protection on the current account. Durability leads to adjacent substitutability...