We demonstrate that multiple stationary rational-expectations equilibria exist in a version of Lucas’s island economy. The existence of these equilibria follows from the fact that there is an indeterminate set of monetary equilibria in the two-period overlappinggenerations model. We show how to construct stationary rational-expectations equilibria by randomizing over the set of nonstationary mo...

It is ironic that in 1964, Dotters’ initial application of percutaneous transluminal angioplasty (PTA) targeted femoral-popliteal stenoses. Now, nearly 4 decades later, although angioplasty has gained wide acceptance as a firstline treatment for diseased coronary, iliac, and renal arteries, its role in femoral-popliteal vessels remains controversial and poorly defined. The initial PTA procedure...

We propose a novel theory of self-fulfilling fluctuations in the labor market. A firm employing an additional worker generates positive externalities on other firms, because employed workers have more income to spend and have less time to shop for low prices than unemployed workers. We quantify these shopping externalities and show that they are sufficiently strong to create strategic complemen...