Given the frequency of price changes, the real effect of a monetary shock is smaller if adjusting firms are the ones with older and, hence, more misaligned prices. This selection effect is important in a large class of sticky-price models with time-dependent price adjustment. We characterize...

Limited commitment for the repayment of consumer debt comes from two places: formal laws granting a partial or complete discharge for debts under certain circumstances, or "bankruptcy," and informal default and renegotiation, or "delinquency." In the US, both channels are used routinely. The...