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,...

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...

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...

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...

the problem of general vs. firm-specific human capital investments.

Sargent's book provides a reinterpretation of the US inflation record over the last half-century, reflecting on how macroeconomic theory has evolved since the beginnings of the rational expectations revolution. It is a basic reference on dynamic macroeconomic theory.

We design and analyze experimental versions of monetary overlapping generations economies under alternative policy regimes. Economies with a constant level of real deficit financed through seigniorage, economies in which the level of deficit is adapted in order to follow a monetary policy with a...

We study the effect on the growth of an economy of alternative financing opportunities in a stochastic growth model with incentive constraints. Efficient accumulation mechanisms are designed and computed for economies that differ in their incentive structure. We show that when borrowing is...

We study economies where government currency and electronic money, drawn from interest bearing deposits in private financial intermediary institutions, are full substitutes. We analyze the impact of competition on policy outcomes under different assumptions regarding: the objectives of the...