In this paper we analyse a model in which firms cannot pay discriminate based on year of entry to the firm, and argue that the wage dynamics are consistent with the empirical results of Beaudry and DiNardo (1991). Their results have been interpreted as supporting a model in which workers are ex...

This paper analyses a model in which firms cannot pay discriminate based on year of entry. It is assumed that workers can costlessly quit at any time, while firms are committed to contracts. We solve for the dynamics of wages and unemployment, and show that real wages display a degree of...

This paper presents a two-party model of fiscal and debt policy in which the parties do not care about policy outcomes when out of office. Unlike other models of this type, the authors' model has predictions that are largely consistent with existing empirical findings about partisan and...

This paper investigates the determinants of price quote revisions on the London Stock Exchange for a sample of highly liquid stocks over a two-week settlement period in September 1990. In our theoretical model the level of optimal price quotes set by market makers are a function of the expected...