Recurrent intervals of inattention to the stock market are optimal if consumers incur a utility cost to observe asset values.When consumers observe the value of their wealth, they decide whether to transfer funds between a transactions account from which consumption must be financed and an investment portfolio of equity and riskless bonds.Transfers of funds are subject to a transactions cost that reduces wealth and consists of two components: one is proportional to the amount of assets transferred, and the other is a fixed resource cost.Because it is costly to transfer funds, the consumer may choose not to transfer any funds on a particular observation date.In general, the optimal adjustment rule---including the size and direction of transfers, and the time of the next observation---is state-dependent.Surprisingly, unless the fixed resource cost of transferring funds is large, the consumer's optimal behavior eventually evolves to a situation with a purely time-dependent rule with a constant interval of time between observations.This interval of time can be substantial even for tiny observation costs.When this situation is attained, the standard consumption Euler equation holds between observation dates if the consumer is sufficiently risk averse.

Branch selection is a key decision in a cadet's military career. Cadets at USMA can increase their branch priorities at a fraction of slots by extending their service agreement. This real-life matching problem fills an important gap in the market design literature, providing strong empirical legitimacy to a series of elegant theoretical works on matching with contracts. Although priorities fail a key substitutes condition, the agent-optimal stable mechanism is well defined, and in contrast to the current USMA mechanism it is fair, stable, strategy-proof, and respects improvements in cadet priorities. Adoption of this mechanism benefits cadets and the Army. This new application shows that the matching with contracts model is practically relevant beyond traditional domains that satisfy the substitutes condition.

Fiscal foresight --the phenomenon that legislative and implementation lags ensure that private agents receive clear signals about the tax rates they face in the future --is intrinsic to the tax policy process.This paper develops an analytical framework to study the econometric implications of fiscal foresight.Simple theoretical examples show that foresight produces equilibrium time series with nonfundamental representations, which misalign the agents' and the econometrician's information sets.Economically meaningful shocks to taxes, therefore, cannot generally be extracted from statistical innovations in conventional ways.Econometric analyses that fail to align agents' and the econometrician's information sets can produce distorted inferences about the effects of tax policies.The paper documents the sensitivity of econometric inferences of tax effects to details about how tax information flows into the economy.We show that alternative assumptions about the information flows that give rise to fiscal foresight can reconcile the diverse empirical findings in the literature on anticipated tax changes.