We develop a business cycle model in which consumption goods, physical capital and human capital are produced in separate sectors.

The purpose of this paper is twofold. First, it introduces a new version of the Edgeworth process with trading activities centered around self-interested enterprising arbitragers; and second it examines how the prices of the derived securities are deteremined under this process.

In econometrics, most null hypotheses are composite, dividing the parameters into parameters of interest and nuisance parameters. The domain of the nuisance parameters can influence the size-corrected critical value and hence the power of a test. We show that the domain of the nuisance...

This paper applies an equilibrium search to study the transition from schooling to work of US high school graduates. We consider the case where there is heterogeneity in firm productivity and the number of firm types is discrete. For this case the estimation problem is non-standard and the...

The smoothed maximum score estimator of the coefficient vector of a binary response model is consistent and asymptotically normal under weak distributional assumptions. However, the differences between the true and nominal levels of tests based on smoothed maximum score estimates can be very...