Using lattice programming methods and order-theoretic fixpoint theory, we are able to provide a first step in describing an ordinal (or qualitative) theory of equilibrium growth under uncertainty for a broad class of accumulation problems. The setting is one where in general the second welfare...

Differential tax treatment of married and single people is a key feature of the tax law in the US and other countries. We develop a matching model with search frictions to analyze the effects these tax provisions have on marriage formation and dissolution. Our main results are the following: (i)...

We ask how barriers to international trade affect TFP when there are monopoly rights in the import-competing industries. Holmes and Schmitz (1995) show that without barriers to trade TFP in these industries is as large as possible. We study the general case of finite barriers to trade. We find...

We study a class of two-sector neoclassical growth models, in which one sector produces consumption goods and the other sector produces the capital goods for both sectors and in which the capital-producing sector has sector-specific externalities. We show analytically that if the capital goods...

The equivalent or compensating variation for a price increase is often calculated using the expenditure function from a statistical (i.e. estimated) demand. If the regression errors are due to unobserved heterogeneity, then the variation from the statistical demand does not generally equal the...

This paper analyzes a model with search frictions, heterogeneous agents, and nontransferable utility, in which each individual observes only a noisy signal of the type of a potential partner. We show that an agent's optimal strategy must take into account not only the realization of the noisy...

One of the most challenging questions in economics is why some countries are so much richer than others. In this paper, we assess the role of cross-country differences in barriers to entry. This is motivated by the recent evidence about both their prevalence in the third world and their harmful...

We analyze a principal-agent model with moral hazard in which the principal has private information about the technology, and the contract offered by her may signal this information to the agent. We characterize Perfect Bayesian Equilibria of the game that possess the following properties that...

We introduce and solve a new class of static portfolio choice problems, where only the best realized alternative matters. A decision maker must simultaneously choose among independent ranked options, and the better alternatives have a lower chance of panning out. Each choice is costly, and just...

We consider the effect of information on the average risk-free rate and the average equity premium in a standard two-period exchange economy with complete markets and a representative agent. We show that information always increases the average risk-free rate. Clearly, perfect information...