This paper develops a search-theoretic model to study the interaction between banking and monetary policy and how this interaction affects the allocation and welfare. Regarding how banking affects the welfare costs of inflation: First, we find that, with banking, inflation generates smaller welfare costs. Second, we show that, lowering inflation improves welfare not just by reducing consumption...

This paper provides a comparative historical analysis of the emergence, consolidation, and reform of the Chilean and Uruguayan welfare states. While until the 1970’s both countries built strikingly similar social protection systems, they subsequently advanced divergent strategies of reform, with Chile following the retrenchment path and Uruguay pursuing the maintenance avenue. My objective is t...

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In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit: JEL classification: E32 E52 E62 E63 Keywords: Optimal simple policy rules Timeless perspective optimal policy Monetary polic...

Here, I provide a guide for those new to the burgeoning field of animal welfare science as to what this comprehensive, relatively young discipline is all about. Drawing on all branches of biology, including behavioural ecology and neuroscience, the science of animal welfare asks three big questions: Are animals conscious? How can we assess good and bad welfare in animals? How can we use science...

A model is developed which allows us to examine the welfare effects of alternative methods of financing access to higher education. Under an extreme specification of the social welfare function, it is shown that it does not matter whether higher education is financed privately or through the exchequer. Under a more general specification of the social welfare function, conditions may be derived ...

lthough health policy is only one part of welfare policy, it is a very distinguishing component of the Danish welfare system, with its massive state involvement: the state provides tax-financed, free medical care, free treatment in hospitals and sickness benefits for all permanent residents. Nearly all hospitals in Denmark are owned and run by the public, leaving only a minimal market for priva...

We study optimal monetary policy for a small open economy in a model where both domestic prices and wages are sticky due to staggered contracts. The simultaneous presence of the two forms of nominal rigidities introduces an additional trade-off between domestic inflation and the output gap. We derive a second-order approximation to the average welfare losses that can be expressed in terms of th...

We examine the distribution of hours of work across 2-digit industrial sectors in OECD countries. We find large disparities when sectors are divided into three types: health and social work, a group that produces goods with home substitutes and all others. We attribute the disparities to the different tax and subsidy policies that countries follow, in a nested CES preference structure with home...

We present a micro-founded search-theoretical model of money in which agents are subject to idiosyncratic liquidity shocks as well as aggregate productivity and monetary shocks. Monetary policy has redistributive effects and persistent effects on output and prices: aggregate shocks will propagate and diffuse gradually as the money distribution adjusts over time. The model is used to study the c...