Intelligent agents may contribute to higher technological growth, if assigned appropriate positions in the economy. These positive effects on growth are unlikely to be internalized on a competitive labor market. The allocation of talent depends on the relative award the market assigns to...

Central banks now generally agree that conventional monetary aggregates are of little use as targets or even indicators for monetary policy, owing to the instability of money demand relations in economies with well-developed financial markets.But monetary theory has provided little guidance for...

Does the practice of inflation targteting reflect sound economic principles? Certainly, the inflation-targeting regime in New-Zealand has been subject to considerable academic scrutiny along these lines. I suggest, however, that some other questions are more interesting for today's discussion....

Two features distinguish European and US labor markets. First, most European countries have substantially more generous unemployment insurance. Second, the duration of unemployment and employment spells are substantially higher in Europe - employment turnover is lower. We show that...

We demonstrate the existence of a monetary policy tradeoff between price-inflation variability and output-gap variability in an optimizing-agent model with staggered nominal wage and price contracts. This variance tradeoff is absent only in the special case in which prices are sticky and wages...