The authors develop an equilibrium search-matching model with risk-neutral agents and two-sided ex-ante heterogeneity. Unemployment insurance has the standard effect of reducing employment, but also helps workers to get a suitable job. The predictions of our simple model are consistent with the...

We analyze the impact of electronic money competition on policy outcomes. We consider di®erent assumptions regarding the objectives of the central bank and its ability to commit to future policies. Electronic money competition can discipline a revenue maximizing government and result in lower...

The authors 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.

In this paper the authors analyze the interaction of two disciplinary mechanisms: competition and reputation. They first study a dynamic model of monopolistic competition with experiencs goods (i.e., quality is observed after goods are purchased). When market power is high enough, reputation...

The authors study the employment and distributional effects of regulating (reducing) working time in a general equilibrium model with search-matching frictions.