Emissions trading mechanisms have been proposed, and in some cases implemented, as a tool to reduce pollution. We explore the similarities between emission-trading mechanisms and monetary mechanisms. Both attempt to implement desirable allocations under various frictions, including risk and...

One of the key roles of the Reserve Bank of India or any central bank is to ensure economic stability in the country. For the purpose, the central bank adopts various measures to ensure that the inflation rates, interest rates, exchange rates and money supply remains under control. It uses tools...

Mainstream macro-models have assumed away financial frictions, in particular default. The minimum addition in order to introduce financial intermediaries, money and liquidity into such models is the possibility of default. This, in turn, requires that institutions and price formation mechanisms...

On December 3, 2015, Mario Draghi, President European Central Bank (ECB), claims: “we are doing more because it works, not because it fails.” Really true or not?To help assess and further promote the very basics of money calculus, as well as an impetus to improve the actions taken by...

In this paper we propose a novel way to model the labor market in the context of a New-Keynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business...

In this paper we propose a novel way to model the labor market in the context of a New-Keynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business...