When labor is indivisible, there exist efficient outcomes with some agents randomly unemployed, as in <link rid="b34">Rogerson (1988)</link>. We integrate this idea into the modern theory of monetary exchange, where some trade occurs in centralized markets and some in decentralized markets, as in <link rid="b25">Lagos and Wright...

This paper studies the relationship between the availability of unsecured credit to households and unemployment. We extend the Mortensen-Pissarides model to include a goods market with search and financial frictions. Households, who have limited commitment, face endogenous borrowing constraints...

This paper extends the Pissarides [Pissarides, Christopher A. Equilibrium Unemployment Theory. Cambridge: MIT (2000)] model of the labor market to include crime and punishment à la Becker [Becker, Gary S. "Crime and punishment: an economic approach." Journal of Political Economy 76 (1968):...