"This paper presents a simple model of government reputation which captures two characteristics of policy outcomes in less developed countries: governments which betray public trust do so erratically, and, after a betrayal, public trust is regained only gradually"--Federal Reserve Bank of...

In this paper we show that interest rate rules lead to multiple equilibria when the central bank faces a limit to its ability to print money, or when private agents are limited in the amount of bonds that can be pledged to the central bank in exchange for money. Some of the equilibria are...

This paper examines the set of Pareto efficient allocations in a finite period Mirrlees (1971, 1976) economy; each period represents a lifetime for an agent who cares about the utility of his descendants. In making Pareto comparisons, we use an interim concept of efficiency, and consider an...