A choice-theoretic, cash-in-advance model is constructed to examine foreign-exchange controls. While foreign-exchange controls improve the trade balance and the balance-of-payments (or exchange rate) they reduce welfare for a distortion-free, small, open economy. This is because foreign-exchange...

The Ricardian model with a continuum of goods is extended to a cash-in-advance environment with variable labor supply, which allows domestic monetary policy to influence real activity through an inflation tax channel and to be internationally transmitted to real activity abroad. The...

This analysis investigates modeling the natural rate of unemployment in settings wh ere labor's utilization has some lumpy aspect to it. Specifically, th e introduction of various nonconvexities into tastes and technology l ead to unemployment in general equilibrium. Equilibria can emerge whe re...