At any given point of time in an actual economy, some individuals hold more money than other individuals do. This non-degenerate distribution of money holdings among individuals is a rationale for a range of policies designed for reallocating liquidity among individuals. However, monetary theory...

In this paper, we develop a tractable model of the labor market featuring on-the-job search and aggregate fluctuations.

We compare the efficiency of price posting and bargaining in a market with search frictions and signaling of goods quality.We focus on the tradeoff between two roles of each pricing mechanism: directing search and reducing asymmetric information. This tradeoff has largely been ignored in the...

Many countries simultaneously suffer from high rates of inflation, low growth rates of per capita income and poorly developed financial sectors. In this paper, we integrate a microfounded model of money and finance into a model of endogenous growth to examine the effects of inflation and...

In this paper, we develop a general stochastic model of directed search on the job. Like in the analogous models of random search on the job, the state of the economy in our model includes the infinite-dimensional distribution of workers across different employment states (unemployment, and...

In this paper, we construct a tractable search model of money with a non-degenerate distribution of money holdings. We model search as a directed process in the sense that buyers know the terms of trade before visiting particular sellers, as opposed to undirected search that has dominated the...

We compare the welfare effects of different emission-reduction policies in a general equilibrium model with heterogeneous plants. We found that an emission standard could outperform an emission tax or a tradable permit. We characterize the equilibrium conditions for this result to hold. We...

We develop a general equilibrium framework to analyze the relationship between the operation of the financial system, inflation and economic growth. We first investigate the dynamic interactions between financial development and growth by analyzing how financial innovations affect real growth,...

In this paper, we develop a tractable model of the labor market where workers search for jobs both while unemployed and while on the job. Search is directed in the sense that each worker chooses to search for the offer that provides the optimal tradeoff between the probability of obtaining the...

In the last few decades there is a clear shift of employment shares from the manufacturing sector to the service sector in the US and in many industrialized countries. At the same time, the structure of residual wages changes considerably, within and across sectors. To understand the sources of...