We develop and estimate a stylized micro-founded model of the US economy. Next we compute the parameters of a simple interest rate policy rule that maximizes the unconditional mean of utility. We show that such a welfare-based rule lies close to the Taylor efficiency frontier. A counterfactual...

We estimate the macroeconomic benefits and international spillovers of an increase in competition using a general-equilibrium simulation model with nominal rigidities and monopolistic competition in product and labor markets. We draw three conclusions after calibrating the model to the euro area...

We estimate the macroeconomic benefits and international spillovers of an increase in competition using a general-equilibrium simulation model with nominal rigidities and monopolistic competition in product and labor markets. We draw three conclusions after calibrating the model to the euro area...

This paper investigates the effect of grouping students by prior achievement into different classes (or schools) in settings where students are competing for admission to programs offering only a limited number of places. We first develop a model that identifies the conditions under which the...

Order display is associated with benefits and costs. Benefits arise from increased execution-priority, while costs are due to adverse market impact. We analyze a structural model of optimal order placement that captures trade-off between costs and benefits of order display. For a benchmark model...

This paper proposes a three-stage model of airline network competition, in which an airline's strategic decisions include its network structure (first stage), flight frequency (second stage), and pricing of all nonstop and one-stop services (third stage). The model links direct and indirect...

This paper provides some interesting insight into the impact of financial freedom and inter-industry competition on commercial banking sector competition in Sri Lanka. The study used a broader set of panel data and employed Panzar-Rosse approach to estimate the degree of bank competition. The...

The theoretical literature of industrial organization shows that the distances between consumers and firms have first-order implications for competitive outcomes whenever transportation costs are large. To assess these effects empirically, we develop a structural model of competition among...

Using a general-equilibrium simulation model featuring nominal rigidities and monopolistic competition in product and labor markets, this paper estimates the macroeconomic benefits and international spillovers of an increase in competition. After calibrating the model to the euro area vs. the...

This paper proposes a dynamic structural model with endogenous productivity to evaluate the impact of R&D on productivity when firms decide how much to invest; this decision depends on the competitive pressure that they face. Using data from Sweden, this paper finds that open market policies and...