This paper uses a three-region framework to examine the effects of European currency unification on EMU and US inflation rates. It considers ways in which increased participation in the EMU might influence inflation choices in Europe and the United States. It also considers how alternative...

This paper develops a framework for analyzing socially and privately optimal bank loan-monitoring decisions, with and without capital regulation. In contrast to the monitoring decision of a social planner who seeks to maximize the utility of aggregate consumption, banks choose to monitor only if...

This article investigates how search costs, price stickiness and product durability influence the impact of inflation on firm markups. We provide evidence that each of these three factors plays an independent role in influencing the responsiveness of markups to inflation. Although we find that...