We examine the implications of inflation for both price dispersion and welfare in a monetary search economy. In our economy, if the degree of buyers' incomplete information about prices is fixed, both price dispersion and real prices are increasing in inflation. As the inflation rate approaches...

Relationships between country size (measured by both population and aggregate GDP) and standard of living (measured by per capita GDP) and the volatilities of aggregate output, consumption, and investment are investigated for a sample of 56 countries. Both characteristics are shown to be...

The effects of entry and exit by monopolistically competitive intermediate goods producers on equilibrium business cycles are analyzed in the presence of internal returns to scale and external returns to specialization. In the environment studied, market power and endogenous entry and exit, in...

Country size, measured by either population or gross domestic product (GDP), is shown to be negatively related to the variances of aggregate output, consumption and investment and positively related to the contemporaneous correlations of consumption and investment with output in a sample of...

Using Kalman filtering and dynamic factor analysis, we decompose fluctuations in real aggregate output, consumption, and investment for the G7 countries into factors that are (i) common across all countries and aggregates, (ii) common across aggregates within a country, and (iii) specific to...

Dynamic factor analysis and Kalman filtering are used to construct a measure of common economic activity for the G7 countries. Common movements are important in productivity, but account for a substantially smaller share of movements in investment, and virtually none of the variation in the...

Strategic interaction among oligopolistic innovators and its implications for economic growth are examined in two dynamic computable general equilibrium models. In each environment, technologies for producing a final good are such that the profits of any intermediate good producer depend on the...