An implicit rationale for a bank reserve requirement is that a central monetary authority is in a unique position (as "social planner) to impose a "socially superior" outcome to that yielded by a free banking system. We illustrate how this can be true in the context of a simple economy modeled...

This paper determines the optimal level of firm-specific training and the optimal level of layoffs when some workers are unreliable in that they may receive and accept offers from outside the firm; more specifically, the paper determines the evolution of firm-specific training and layoffs as a...