There is a large body of evidence indicating that cross-country differences in income levels are associated with differences in productivity. If workers are much more productive in one country than in another, restrictions on immigration lead to large efficiency losses. The paper quantifies...

The square root function has a unique positive fixed point. This function has the following properties: it is strictly increasing and strictly concave, with f(0)=0, and there are points a0 and b0 such that f(b)a and bf(b). It is shown that any function from Rn to Rn satisfying these properties...

There are several models of outside money in which some inflation accomplished through lump-sum transfers is optimal. It is shown here that inflation can be optimal in a model of inside money, essentially the model in Cavalcanti-Wallace (1999). The possibility of inflation comes about via the...

(Copyright: Elsevier)

A random-matching model (of money) is formulated in which there is complete public knowledge of the trading histories of a subset of the population, called the banking sector, and no public knowledge of the trading histories of the complement of that subset, called the non bank sector. Each...

There is wide agreement that currency was not available in conveniently small denominations prior to the 19th century. Here, estimates of the costs of providing and maintaining money (coins) in 15th century Europe and parameterized versions of a matching model of money are used to find the...