Since the writing of David Hume, in the eighteenth century, there has been a general agreement amogst economists that an increase in the stock of money leads, initially, to an increase in economic activity. Most writer have attributed the real effects of money, in the short run, to mistaken...

Using vector autoregressions on U.S. time series, we find that technology shocks induce an ‘S’- shaped cross-correlation function for the trade balance and the terms of trade (S-curve). In calibrating a prototypical international business cycle model to match the S-curve under complete and...

This paper compares two alternative theories of Aggregate supply, both with a "New Keynesian Flavor". The first assumes that prices are rigis due to the existence of menu costs of the kind advanced by Mankiw [38] and Akerlof and Yellen [2]. The second derives price stickiness endogenously as one...

This paper delovers the solution to an optimal search problem with learning where the searcher has distinguishable search opportunities. The optimal sampling strategy is characterized by simple reservation prices that determine which of the search alternatives to sample and when to stop search.

In this paper the authors study the determinants of the long term yield spread between Italian and German government bonds using daily observations for a period 1 January 1995- 28 October 1997.

Dynamic models with inequality constraints pose a challenging problem for two major reasons: Dynamic Programming techniques often necessitate a non established differentiability of the value function, while Euler equation based techniques have problematic or unknown convergence properties. This...

This paper examines organisational forms in the car industry, in order to derive stylised facts that can be used to medel the interaction between firm structure and market structure. The analysis of the car industry since 1945 points to a fundamental change in production technology, that brought...

The authors provide an epistemic analysis of forward induction in games with complete and incomplete information. They suggest that forward induction may be usefully interpreted as a set of assumptions governing the players' belief revision processes, and define a notion of strong belief to...