Existence of voting-market equilibria

We show the existence of an equilibrium in a model where private goods are allocated by markets and the public good (bad) is allocated by majority rule voting.     

Optimal monetary policy under rational expectations with a micro-based supply function

Combination monetary policies to stabilize both price and output in the face of IS, LM, and supply shocks are examined in a typical macromodel with the aggregate supply function expanded to include the real interest rate. The major results are that different combination policies are required for price and for output stability for both IS and supply disturbances, while the Poole result still holds for LM shocks. We also find a combination policy which stabilizes price and output given both IS and supply disturbances. Pure policies cannot, in this more general framework, be ranked except for LM disturbances.