We study the transmission of liquidity shocks from one sector of the economy to other sectors in a general equilibrium model with multiple trading venues connected by profit-seeking arbitrageurs. Arbitrageurs effectively provide liquidity to investors by inter-mediating trades between venues....

This paper studies the transmission mechanism of the post-crisis interest rate policy. In particular, we are interested in explaining an upward regime shift in the spreads between interest on reserves (IOR) and overnight funding rates in Jan 2018. While traditional theories would understand such...

We introduce a new suite of macroeconomic models that extend and complement the Debt, Investment, and Growth (DIG) model widely used at the IMF since 2012. The new DIG-Labor models feature segmented labor markets, efficiency wages and open unemployment, and an informal non-agricultural sector....

We present a model of offshoring of tasks to a developing nation, which is characterized by a minimum wage formal sector and a flexible wage informal sector. Some offshored tasks are outsourced by the formal sector to the lower wage informal sector. An improvement in the productivity in...

Stock Exchange is a hub of primary and secondary market playing a crucial role in the economy. Stock exchange provides a place to the buyers and sellers of the shares and securities. For this purpose National Stock Exchange was established by the leading institutions in mid 1990s with the main...

Small firms dominated the American economy in the nineteenth century, and still dominate in many developing economies today. This paper tests whether geographic market segmentation due to underdeveloped intracity transportation technology precludes the emergence of large retail/wholesale stores....

Asset heterogeneity is widely believed to hurt the liquidity in markets of many important fixed-income assets such as corporate and municipal bonds. We develop a model in which heterogeneous assets are traded with search friction to study the impact of a quasi-consolidated (QC) trading design in...

Retailing has undergone transformation since the last decade. There has been lot of closure of retail stores which had been successful in the past. The closure of the stores are related to low footfalls in the stores. This is due to the change in the consumer behavior in the present day....

We present a competitive model of takeovers among heterogeneous firms. Each firm owns a tradeable "project" and non-tradeable "skill". The complementarity between them generates takeovers. We construct an equilibrium with two segmented markets. In one market, firms pay a fee to an intermediary...

We study a model in which firms compete to retain and attract workers searching on the job. A drop in the rate of on-the-job search makes such wage competition less likely, reducing expected labor costs and lowering inflation. This model explains why inflation has remained subdued over the last...