This paper presents a simple model of risk-averse banks that face uncer-tainty over funding conditions in the money market. It shows when increasedfunding uncertainty causes interest rates on loans and deposits to rise, whilebank lending and bank pro…tability fall. It also …nds that funding...

In many markets firms set posted prices which are potentially negotiable. We analyze theoptimal marketing mix of pricing and bargaining when price takers buy at posted prices butbargainers attempt to negotiate discounts. The optimal bargaining strategy involves the firmsoffering bargainers...

In this paper we use a dynamic structural life-cycle model to analyze the employment,fiscal and welfare effects induced by unemployment insurance. The model features a detailedspecification of the tax and transfer system, including unemployment insurance benefitswhich depend on an individual's...

Many social networks have the following properties: (i) a short average distancebetween any two individuals; (ii) a high clustering coe±cient; (iii) segregation pat-terns; the presence of (iv) brokers and (v) hubs. (i) and (ii) de¯ne a small worldnetwork. This paper develops a strategic...

This paper discusses the place of oligopoly in international trade theory, and ar-gues that it is unsatisfactory to ignore …rms altogether, as in perfectly competitivemodels, or to view large …firms as more productive clones of small ones, as in monop-olistically competitive models. Doing...

This paper examines monetary policy in a currency union whose member countries exhibitheterogeneous rates of limited asset markets participation (LAMP). As a result risksharing among member countries is imperfect and the monetary transmission mechanismcan dier across countries. In the limit the...

This paper presents simple conditions for monopoly third-degree price discrimination to have negative or positive e¤ectson aggregate consumer surplus. Consumer surplus is often re-duced by discrimination, for example when total welfare (con-sumer surplus and pro…ts) falls. Surplus increases...

Carbon leakage is a major concern for policymakers involved with environmentalinitiatives such as the European Unions emissions trading scheme and similar cap-and-trade proposals in the United States, Australia, and elsewhere. This paperprovides a framework for understanding the drivers...

Contemporaries and historians have highlighted London’s position asthe world’s leading financial centre, and its dominance of both tradefinancing and international capital investment at this time. The cur-rent historical literature focuses on the presence of the London StockExchange and...

We present a gravity model that accounts for multilateral resistance, firm heterogeneity and country-selectioninto trade, while accommodating asymmetries in trade flows. A new equation for the proportion of exporting…firms takes a gravity form: the extensive margin is also accected by...