What is the impact of international migration on the wage structure? Empirically, it is difficult to find any effect at all. This essay gives a new theoretical explanation for this conspicuous absence, emphasising non-convexities in the technology of individual firms due to communication costs....

Using a simple model of social learning, we endogenize growth and distribution in a dualistic developing society. For given parameters of the learning technology, a trade-off between growth and equity results. On the other hand, more intensive social interaction between agents will raise the...

In economic reality, reactions to external shocks often come with a delay. On the other hand, agents try to anticipate future developments. Both can lead to difference-differential equations with an advancing argument. These are more difficult to handle than either difference or differential...

This paper provides one explanation why cash is still used for transactions despite a broad diffusion of noncash payment instruments. In particular, we argue that a distinctive feature of cash—a glance into one's pocket gives a signal of the remaining budget and past expenses—provides...

This paper presents a comparable set of results on the monetary transmission channels on firm investment (the interest rate channel and the broad credit channel) for the four largest euro-areacountries (Germany, France, Italy and Spain), using particularly rich micro datasets for eachcountry...

In this paper we present comparable results on the determinants of firms' investment and their link to monetary policy. The results have been obtained by the Eurosystem Monetary Transmission Network. This network has produced a series of papers in which the use of micro data permits estimating...