This paper looks at the inter-temporal price discrimination game that arises when a monopolist faces naïve-time-inconsistent consumers. En route to solving this game, we introduce two new solution concepts for dynamic games where some players are time inconsistent. The first solution concept is...

This paper analyzes a bilateral trade problem where the seller makes hidden investment that influences the buyer's private valuation. Complete contracts can be written on observable trade decisions. It is shown that efficiency level in investment and trade is negatively related to the scope of...

Recent economic growth theory has suggested that wealth differences across nations must be due, at least in part, to the failure in many places to adopt existing production techniques. There are many potential reasons for the failure to adopt existing technology, including the political clout of...

The paper presents a three period model that studies the eects of IMF loans on borrowers’ and lenders’ welfare highlighting the fact that the IMF has both de jure and de facto seniority rights over private creditors. It is shown that an IMF intervention affects borrowers and...

This paper carries out a comparative analysis of the inflation effects on relative price variability (RPV) in two economies with a inflationary experiences clearly different: Argentina and Spain. The results indicate non-neutrality of inflation, particularly in extreme inflation. The main...

The effects of inflation on real wage dispersion and welfare are studied in a cash-in-advance economy with a Walrasian goods market but a labor market with search friction. In the labor market, firms post wages and both employed and unemployed workers search among the posted wages. In...

This paper estimates the agglomeration benefits that arise from vertical linkages between firms in the context of Indonesia. The analysis is based on international trade and economic geography theory developed by Krugman and Venables (1995). We identify the agglomeration benefits off the spatial...

While home ownershipt provides a great deal of personal and social benefits, it poses a substantial constraint on individuals' asset allocation.

Decision theorists claim that an ordinal measure of risk may be sufficient for an agent to make a rational choice under uncertainty. We propose a measure of financial risk, namely the Varying Cross-sectional Risk (VCR), that is based on a ranking of returns. VCR is defined as the probability of...

Using a generalized cross-spectral approach, we propose a model-free omnibus statistical procedure to check whether the direction of changes in an economic variable is predictable using the history of its past changes. A class of separate inference procedures are also given to gauge possible...