We show analytically that the credibility problem which has affected the European Stability Pact originates from the insufficient distinction between two reasons for having binding fiscal constraints. The first reason deals with the governments' tendency to neglect the effects of their fiscal...

This paper shows that two societies differing because of the people's initial propensity to devote time and efforts to non-profit activities may never converge. This lack of convergence is interpreted as the tendency of the cultural values and attitudes dominant in each society to perpetuate...