We study the international monetary policy design problem within an optimizing two-country sticky price model, where each country faces a short run trade-off between output and inflation. The model is sufficiently tractable to solve analytically. We find that in the Nash equilibrium, the policy...

In this paper we present a simple theory-based measure of the variations in aggregate economic efficiency: the gap between the marginal product of labor and the household’s consumption/leisure tradeoff. We show that this indicator corresponds to the inverse of the markup of price over social...

Intro -- Editorial -- Abstracts -- 1 Work and Leisure in the United States and Europe: Why So Different? -- 2 Job Loss, Job Finding, and Unemployment in the U.S. Economy over the Past Fifty Years -- 3 The Rise in Firm-Level Volatility: Causes and Consequences -- 4 Monetary Policy Under...

We develop a bottom-up approach to estimating the slope of the primitive form of the New Keynesian Phillips curve, which features marginal cost as the relevant real activity variable. Using quarterly micro data on prices, costs, and output from the Belgian manufacturing sector, we estimate...