We model markets with adverse selection as matching markets. In a given match the informed or the uniformed party is chosen to make a take-it-or-leave-it proposal. This allows to account for the simultaneous presence of signaling and screening. Moreover, the possibility to dissolve matches...

A principal must decide whether or not to implement a project which originated with one of her employees. The employees have private information about the quality of the project. A successfully implemented project raises the inventor's chance of promotion, at his peer's expense, but a failed...

The issue of measuring the relative importance of income factors in the distribution of household income is at the heart of studies of changes in income inequality. Usual decompositions methods mostly based on Shorrocks (1982) framework allow for a broad evaluation of the contribution of income...

There are many situations where two interacting individuals can benefit from coordinating their actions. We examine the endogenous choice of partners in such social coordination games and the implications for resulting play. We model the interaction pattern as a network where individuals...

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We analyze a two country-two goods model of international trade in which citizens in each country differ by their specific factor endowments. The trade policy in each country is set by the politician who has been elected by the citizens in a previous stage. Due to a delegation effect citizens...

A density forecast of the realization of a random variable at some future time is an estimate of the probability distribution of the possible future values of that variable. This article presents a selective survey of applications of density forecasting in macroeconomics and finance, and...

This paper establishes an identification of stationary equilibria of an infinite-horizon economy and equilibria of a naturally related finite economy. More specifically, the connection is established, firstly, between cycles of an overlapping generations economy and the equilibria of a finite...

This paper considers maximum likelihood estimation and inference in the two-way random effects model with serial correlation. We derive a straightforward maximum likelihood estimator when the time-specific component follow an AR(1) or MA(1) process. The estimator is easily generalized to...

We study a dynamic equilibrium model where the same optimal monetary policy is implemented with and without full commitment if government debt is indexed. In contrast, with nominal debt, the full commitment policy is time inconsistent, since the government is tempted to inflate away its nominal...