Urban economics has traditionally viewed cities as having advantages in production and disadvantages in consumption. We argue that the role of urban density in facilitating consumption is extremely important and understudied. As firms become more mobile the success of cities hinges more and more...

The textbook graphical analysis of price control is inappropriate any time thre is substantial consumer heterogeneity. In cases, such as rental apartments, where one unit is usually the maximum bought per consumer, and the downward slope of the demand function comes exclusively from consumer...

If household portfolios are constrained by borrowing and short-sales restrictions, or by fixed costs of participating in risky asset markets, then alternative retirement savings systems may affect household welfare by relaxing these constraints. This paper uses a calibrated partial-equilibrium...

Laboratory and field studies of time preference find that discount rates are much greater in the short-run than in the long-run. Hyperbolic discount functions capture this property. This paper solves the decision problem of a hyperbolic consumer who faces stochastic income and a borrowing...

This paper constructs a simple model of home productions that demonstrates the connection between the intertemporal elasticity of substitution in market consumption (IES) and the static elasticity of substitution between home and market consumption (SES). Understanding this connection is...

Inspired by the recent literature on aggregation theory, this paper introduces HITS, a semiparametric model of consumer demand that allows for diversity in tastes. The strong variation of budget shares observed aacross income strata can arise from two economic factors: the individual income...

According to conventional wisdom, long-term bonds are appropriate for conservative long-term investors. This paper develops a model of optimal consumption and portfolio choice for infinite-lived investors with recursive utility who face stochastic interest rates, solves the model using an...

Firms sometimes try to "poach" the current customers of their competitors by offering them special inducements to switch. The authors analyze duopoly poaching under both short-term and long-term contracts in two polar cases: either each consumer's brand preferences are constant from one period...

For guidance in determining which items should be included in comprehensive NDP and how they should be included, reference is often made to the libearized Hamiltonian from an optimal growth problem. This note shows how the heuristic linearized-Hamiltonian argumentcan be given a rigorous welfare...