We develop a stylized two-sided model of the local broadband Internet market where prices are used to facilitate “interactions” between the Broadband Internet Service Provider’s (BISP) subscribers and Content and Application Service Providers (CASPS), as well as the priority (i.e., speed)...

What are the welfare effects of the information contained in macroeconomic statistics, central-bank communications, or news in the media? We address this question in a business-cycle framework that nests the neoclassical core of modern DSGE models. Earlier lessons that were based on “beauty...

A fundamental question in monopolistic competition theory is whether the market allocates resources efficiently. This paper generalizes the Spence-Dixit-Stiglitz framework to heterogeneous firms, addressing when the market provides optimal quantities, variety and productivity. Under constant...

This paper is concerned with the implicit values of urban accessibility and air quality in Sweden. Based on the hedonic wage and rent theory, we construct an econometric model to compute such values, and illustrate their implications for regional sustainability analysis. It is shown that for...

Economists often favor market-based mechanisms (e.g., auction) over non-market based mechanisms (e.g., lottery) for allocating scarce public resources on grounds of economic efficiency and revenue generation. When the usage of the resources in question generates negative externalities that are...

I show that firms that face a reduction in credit supply reduce product creation, by using variation from US banks' exposure to the mortgage market to instrument for credit supply. The magnitude is substantial: firms facing a one-standard-deviation decrease in credit supply offered 10% fewer...

This paper uses the bottleneck model of Vickrey (1969) to empirically measure the social cost of traffic congestion in the US. Using a detailed trip-level data, we estimate extra travel time over and above hypothetical free-flow travel time, which we call "queuing time", for each average commute...

We investigate the redistributive and welfare effects of disinflation in a two-agent New Keynesian (TANK) model characterized by Limited Asset Market Participation (LAMP) and wealth inequality. We highlight two key mechanisms driving our long-run results: i) the cash in advance constraint on...