We consider an entrepreneur that is the sole producer of a cost reducing skill, but the entrepreneur that hires a team to use the skill cannot prevent collusive trade for the innovation-related knowledge between employees and competitors. We show that there are two types of diffusion-avoiding...

We analyze the implications of a market imperfection related to the inability to establish intellectual property rights, that we label "unverifiable communication." Employees are able to collude with external parties selling "knowledge capital" of the firm. The firm organizer engages in...

We lay out a model of wage bargaining with two leading features: bargaining is ex post to relevant investments, and there is individual bargaining in firms without a Union. We compare individual ex post bargaining to coordinated ex post bargaining, and we analyze the effects of wage formation....

This paper analyzes the long-run determinants of inflation differentials in a monetary union. First, we aim at establishingsome stylized facts relating the regional dispersion in headline inflation rates in the euro area as well as in the main components of the consumer price index. We find that...

JEL Classification: E52, E61, E31, E42, E43

This article analyzes the role of credit market frictions in business-cycle fluctuations and in the transmission of monetary policy. We estimate a closed-economy dynamic stochastic general equilibrium (DSGE) model for the euro area with financially constrained households and firms and embedding...

The financial crisis clearly illuminated the potential amplifying role of financial factors on macroeconomic developments. Indeed, the heavy impairments of banks’ balance sheets brought to the fore the banking sector’s ability to provide a smooth flow of credit to the real economy. However,...

Euro area data show a positive connection between sovereign and bank risk, which increases with banks' and sovereign long run fragility. We build a macro model with banks subject to incentive problems and liquidity risk (in the form of liquidity based banks' runs) which provides a link between...