This study develops a consumption-based asset pricing model in which domestic consumers can buy goods from domestic and foreign markets but can only invest in domestic markets. In this model, the exchange rate influences asset prices through the marginal utility of consumption and increases the...

Matrix conic optimization induced by spectral norm (MOSN) has found important applications in many fields. This paper focus on the optimality conditions and perturbation analysis of the MOSN problem. The Karush–Kuhn–Tucker (KKT) conditions of the MOSN problem can be reformulated as a...

Matrix conic optimization induced by spectral norm (MOSN) has found important applications in many fields. This paper focus on the optimality conditions and perturbation analysis of the MOSN problem. The Karush–Kuhn–Tucker (KKT) conditions of the MOSN problem can be reformulated as a...

In this paper, we consider a class of mathematical programs governed by second-order cone constrained parameterized generalized equations. We reformulate the necessary optimality conditions as a system of nonsmooth equations under linear independence constraint qualification and the strict...

Using a Mortensen-Pissarides search-and-matching framework, this paper investigates the importance of search frictions in determining the welfare and distributional effects of tax reforms that re-allocate the tax burden from capital to labour income. Calibrating the model to the UK economy, we...

This paper evaluates the e¤ects of policy interventions on sectoral labour markets and the aggregate economy in a business cycle model with search and matching frictions. We extend the canonical model by including capital-skill complementarity in production, labour mar- kets with skilled and...