Most workers are only partially insured against unemployment. One reason is that high unemployment compensation creates a free rider problem when monitoring of job search behavior is limited; people who do not seek employment (non-workers) may nevertheless collect unemployment compensation. We...

We test the validity of three models of intertemporal consumption choice(the permanent income hypothesis, the myopic model, and the consumption insurance model) by means of mobility indexes for the underlying consumption distribution. Each of the three models delivers different transition laws...

We develop a model of waiting lists for public hospitals when physicians deliver both private and public treatment. Public treatment is free but rationed, i.e., only cases meeting some medical criteria area admitted for treatment. Private treatment has no waiting time but entails payment of a...

The paper's theorems reverse two standard results of New Keynesian economics simply by appending endogenous investment to a benchmark imperfect competition-sticky price model. Our results are: (a) a passive interest rate rule, where the monetary authority responds to inflation by lowering the...

A firm entering a market often has to solve the problem that consumers do not know the quality of its product. The present paper, studying entry by a firm facing an incumbent rival, shows that the latter's reaction to entry can work as a substitute for the entrant's revelation costs. As a...

Labor contracts are a way of sharing idiosyncratic production risks between entrepreneurs and workers, especially when such risks are too complex for contingent contracts to be written on them. So it is important to understand how equilibrium employment and wages are affected by risk re-lated...

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This paper uses a panel VAR model to improve upon the existing literature on interregional risk sharing channels (e.g. Asdrubali, Sorensen and Yosha, 1996) in several respects. First, it endogenizes the output process within a multi-equation framework, capturing the dynamic feedback between...

Despite wide recognition of their significant role in explaining sustained grwoth and economic development, uncompensated knowledge spillovers have not yet been fully modeled with a microeconomic foundation. The main purpose of this paper is to illustrate the creation of knowledge as well as its...

The earlier work on corruption reform often argues that a broader set of reforms be implemented. The main purpose of the paper is to examine the validity of this argument by formalizing the analysis of the interactions of procurement reforms. The model not only supports well-known interaction...