We study the determinants of political myopia in a rational model of electoral accountability where political ability is ex-ante unknown and policy choices are not perfectly observable. On the one hand, elections improve accountability and allow to keep well-performing incumbents. On the other,...

We study whether labor market institutions affect the volatility and correlations of macroeconomic variables for a sample of 20 OECD countries. Labor market rigidities are characterized with a number of indicators; volatilities and correlations are computed in several ways. Union coverage and...

This paper formalizes in a fully-rational model the popular idea that politicians perceive an electoral cost in adopting costly reforms with future benefits and reconciles it with the evidence that reformist governments are not punished by voters. To do so, it proposes a model of elections where...

This paper presents a theoretical model that can aid the understanding of how wage inequality and mobility are jointly determined. The model shows that the correlation between inequality and mobility can be used to identify the cause of changes in inequality. Changes in the production sector...

This paper formalizes in a fully-rational model the popular idea that politicians perceive an electoral cost in adopting costly reforms with future benets and reconciles it with the evidence that reformist governments are not punished by voters. To do so, it proposes a model of elections where...

We set up a signaling game where individuals differ in ability and wealth. Higher ability means larger benefit supported by the government. Costly signals are used to transmit information regarding own deservingness. However, capital market imperfections may perturb the signals by limiting the...