House prices exhibit substantially more momentum, positive autocorrelation in price changes, than existing theories can explain. I introduce an amplification mechanism to reconcile this discrepancy. Sellers do not set a unilaterally high or low list price because they face a concave demand curve: increasing the price of an above-average-priced house rapidly reduces its sale probability, but cutting the price of a below-average-priced house only slightly improves its sale probability. The resulting strategic complementarity amplifies frictions because sellers gradually adjust their price to stay near average. I provide empirical evidence for concave demand using a quantitative search model that amplifies momentum two- to threefold.

I study the interaction between imperfect labor contracts and international trade in a setting in which workers have private information about their own abilities. When an individual’s contribution to firm output can be measured accurately in some activities but not in others, the most able workers select occupations in which their pay most closely reflects their own performance. In a world economy with two otherwise similar countries that have different distributions of talent, the country with the more heterogeneous labor force exports the good that is produced by the most talented individuals. In this country, trade exacerbates the “polarization” of the labor force and often worsens the distribution of income.

It will be convenient to classify Irish trade in the sixteenth century into four divisions, to treat each division separately, and then to summarize results. The basis of classification is economic as well as geographic, and comprises: (I) the English Pale; (2) the southern part of Ireland (the province of Munster and part of Leinster); (3) Connaught (the western province); (4) Ulster (the North of Ireland). (I) The English Pale in the fifteenth and sixteenth centuries was that part of Ireland in which the majority of the inhabitants were of English birth or descent and in which English law was current and English customs prevalent. The border line was a variable one, but in gener 1 we mean by the English Pale the four counties of Dublin, Kildare, Meath,' and Louth (often spoken of as Uriell). This part of the country, extending inland some twenty or thirty miles and north and south about fifty miles, was distinctively English.2 Its chief cities, Dublin and Drogheda, had been settled by men from Bristol3 and other English cities in the twelfth and thirteenth centuries. The former city became the headquarters of the English administrative system and very rapidly developed into a thriving trade center.4 The patronage