Governments, especially in developing countries, routinely provide large-scale public employment programs. This paper studies such programs and their impact on unemployment rates, capital accumulation, and the process of development. An overlapping generations model with production is studied...

This paper studies the effects of unemployment policies in a simple static general equilibrium model with adverse selection in the labour market. Firms offer a contract that induces the self-selection of workers. In equilibrium, all unskilled workers are screened out and some skilled workers are...

The prevailing models of liquidity traps suggest that a deflationary trap is a stable steady state in a multiple equilibria model. These models implicitly assume that the central bank accelerates the process of disinflation by following a Taylor rule even though it knows the positive...

This paper studies the effects of unemployment policies in a simple static general equilibrium model with adverse selection in the labor market. Firms offer a contract that induces the self-selection of workers. In equilibrium, all unskilled workers are screened out and some skilled workers are...

This paper studies firms' job creation decisions in a labor market with search frictions. A simple labor market search model is developed in which a firm can search for a second employee while producing with a first worker, and this creates the equilibrium size distribution of firms. A firm...

We explore the implications of adopting a Taylor-type interest-rate rule in a simple monetary growth model in which budget deficits are financed partly by unbacked government debt. To ensure uniqueness of the steady-state equilibrium, monetary policy cannot be either too "active" or too...

This paper studies fiscal--monetary policy interactions in an endogenous growth model with multiple assets. Under an interest-rate rule, there are two Pareto-ranked balanced growth equilibria. The E-stability principle is used to pin down an equilibrium. Interestingly, expectational...