We study the optimal design of unemployment insurance for workers sampling job opportunities over time. We focus on the optimal timing of benefits and the desirability of allowing workers to freely access a riskless asset. When workers have constant absolute risk aversion preferences, it is...

This paper extends Shimer's (2005) Mismatch model to allow for endogenous mobility. Rather than work directly in the original model, I use a related framework, the stock-flow matching model (Taylor, 1995; Coles and Muthoo, 1998). One of the contributions of this paper is therefore to compare the...

The paper explores the interaction between sector-specific human capital accumulation and sector-specific productivity or demand shocks. Our objective is to better understand the determinants of skill and experience premia, the costs of displacement for workers with long job tenure, and the...

This paper explores the tension between risk sharing and risk taking linked to securitization. Financial development typically leads to an increase in securitization that helps financial institutions to share idyiosincratic risk. By increasing expected returns, risk sharing tends to reduce the...

This paper explores price formation in environments with multidimensional private information. Asset sellers are informed both about their need to raise cash and about the quality of the asset they are selling. Asset buyers have rational expectations about the distribution of assets for sale at...

In reality, many other markets are characterized by a small amount of search frictions, yet time variation in gross flows and real economic activity are less pronounced than in the labor and housing markets. This paper asks "why?" Preliminary evidence suggests that heterogeneity amongst workers...

We develop a dynamic equilibrium model of asset markets with adverse selection. There exists a unique equilibrium in which better quality assets trade at higher prices but with a lower price-dividend ratio in less liquid markets. Sellers of high-quality assets signal quality by accepting a lower...

A growing body of evidence suggests that private information is important in the mortgage-backed securities market. Recent research reconsiders the theory of how investors trade in the presence of private information. This paper summarizes the evidence and uses the new theoretical approach to...

A growing body of evidence suggests that private information is important in the mortgage-backed securities market. Recent research reconsiders the theory of how investors trade in the presence of private information. This paper summarizes the evidence and uses the new theoretical approach to...

Real wage rigidities cause jobless recoveries. Suppose that a one-time shock reduces the capital stock below trend. If wages are flexible, they decline and employment increases at the moment of the shock, before both revert back to normal levels as the economy grows back to trend. If wages are...