We provide a macroeconomic theory where demand for goods has a productive role. A search friction prevents perfect matching between producers and potential customers. Larger demand induces more search, which in turn increases GDP and measured TFP. We embed the product-market friction in a...

Cross-border migration can act as an important adjustment mechanism to country-specific shocks. Yet, depending on who moves, it can have unintended consequences for business cycle stability. This paper argues that the skill composition of migration plays a critical role. When migration flows...

Search theoretic models of money emphasize monetary exchange as the outcome of economic environments characterized by bilateral trading frictions. This paper analyzes the efficiency of monetary exchange in a search model of fiat money where individuals invest costly effort in the exchange...