We analyze incomplete contracts to induce efficient investment. With exogenous switching costs, fixed-price contracts are efficient, generate some rigidity in prices, are renegotiated intermittently by possibly small amounts, and when inflation is positive, generate asymmetric responses to shocks, all consistent with evidence on prices and wages. With two-sided specific investments, efficiency requires prices to have sufficient escalator clauses to avoid renegotiation, as observed in many long-term contracts. A third case, with one-sided specific investments, can generate "take or pay" contracts and explain why firms sometimes pay for specific investments that appear to benefit employees directly.

This paper analyzes dynamics of production and inventories at the General Motors Corporation during the 1920's and 1930's. We begin by examining anecdotal evidence on the nature of the production control system in force during that period. Motivated by that evidence, we then extend the conventional linear-quadratic model of production behavior to take account of annual shutdown. Finally, we apply the modified model to newly available data on monthly unit production, sales, and inventories during 1924-1940. GM appears to have been aiming to maintain a targeted level of inventory relative to expected sales and, secondarily, to smooth production.

In this paper, we use the relative moments in bank loans and commercial paper to provide evidence on the existence of a loan-supply channel of monetary-policy transmission. We find that tighter monetary policy leads to a shift in firms' mix of external financing: commercial paper issuance rises while bank loans fall. This suggests that contractionary policy can indeed reduce loan supply. Furthermore, such shifts in loan supply seem to affect investment, even controlling for interest rates and output.

The Energy Modeling Forum working group 12 specified 13 standardized scenarios reflecting a range of carbon emission-control levels, as well as sensitivities on key standardized inputs. These scenarios were ultimately implemented by 14 modeling teams employing a wide variety of technoeconomic models, although not every model could implement every scenario. In addition to these model comparisons, ten study groups were formed to analyze issues not being addressed by the 14 models and 13 scenarios. These groups used additional models and methods to analyze issues not addressed in the 13 original scenarios.

We estimate a dynamic two-country model in which economic fluctuations are driven by a worldwide supply shock, country-specific supply shocks, and relative fiscal, money, and preference shocks. Identification is achieved using only long-run restrictions, based on a theoretical model. The main results, are: (i) supply shocks, particularly country-specific ones, are very important in generating international business cycles, (ii) although the post-1973 flexible-exchange-rate period has been inherently more volatile, there are no differences in transmission properties of economic disturbances across exchange-rate regimes for the endogenous variables we focus on.