What is the role of a country's financial system in determining technology adoption? To examine this, a dynamic contract model is embedded into a general equilibrium setting with competitive intermediation. The terms of finance are dictated by an intermediary's ability to monitor and control a...

In his pivotal contributions during the marginal revolution, Leon Walras along with W.S. Jevons assigned subjective utility directly to commodities (goods and services) as, in effect, a simplifying assumption — an assumption destined to become the keystone of neoclassical economics. But this...

Based on some elementary results on duality, the paper proposes a much simpler way of deriving the class of non-homothetic CES production functions which was derived as a solution to a partial differential equation that defines the elasticity of substitution

A key property of the Aiyagari-type heterogeneous-agent models is that the equilibrium interest rate of public debt lies below the time discount rate. This fundamental property, however, implies that the Ramsey planner's fiscal policy may be time-inconsistent because the forward-looking planner...

We develop two models of economic growth with exhaustible natural resources and consumers heterogeneous in time preferences. The first model assumes private ownership of natural resources. In the second model, natural resources are commonly owned and the resource extraction rate is chosen by...

Staggered nominal price setting introduces predictable sales variations at the firm level. We study the implications of staggered prices in a framework where, because of increasing marginal cost, firms use inventories to smooth production and thereby separate sales from production. Conventional...