This paper formulates and estimates a three-shock US business cycle model. The estimated model accounts for a substantial fraction of the cyclical variation in output and is consistent with the observed inertia in inflation. This is true even though firms in the model reoptimize prices on...

This paper studies the optimal bankruptcy policy for repurchase agreements (repos) with respect to their exemption from the automatic stay of bankruptcy. The exemption from automatic stay has been one of the key contributors to the development of the repo market as a major source of funding for...

Job amenities are explicitly included in a model of job choice over the life cycle. The amenities are characterized by an indivisibility--a worker must be present at a job to enjoy its amenities. This chacterization has implications on initial job choice, a worker's wage profile and whether they...