This paper studies the effects of local interactions on the distribution of employment in a Keynesian-type model with strategic complementarities. It is shown that rational expectations generate symmetric equilibria for any interaction structure except autarky. Under adaptive expectations, the...

This paper revisits the question if the user cost of capital plays an important role for investment decisions using Bayesian estimation techniques. These methods offer advantages over classical econometric tools in this area: The most important are that prior distributions offer a convincing way...

A welfare analysis of a risky policy is impossible within a linear or linearized model and its certainty equivalence property. The presented algorithms are designed as a toolbox for a general model class. The computational challenges are considerable and I concentrate on the numerics and...

We propose a Bayesian methodology that enables banks to improve their credit scoring models by imposing prior information. As prior information, we use coefficients from credit scoring models estimated on other data sets. Through simulations, we explore the default prediction power of three...

In this paper we consider bayesian semiparametric regression within the generalized linear model framework. Specifically, we study a class of autoregressive time series where the time trend is incorporated in a nonparametrically way. Estimation and inference where performed through Markov Chain...

This paper extends the analogy previously established by Leamer (1978a), between a Bayesian inference problem and an economics allocation problem, and shows that posterior modes can be interpreted as optimal outcomes of a bargaining game. This bargaining game, over a parameter value, is played...

We propose a quantum-like description of markets and economics. The approach has roots in the recently developed quantum game theory. Quantum Zeno paradoxes and noncomutative quantum mecanics are also discussed.

In this paper we investigate how “civil service” personnel management interacts with bureaucratic discretion to create high capacity, expert bureaucracies populated by policy-motivated agents. We build a model in which bureaucrats may invest in (relationship specific) policy expertise, and...