We investigate the causal relationship between judicial efficiency and firm size across Italian municipalities, exploiting spatial discontinuities in tribunals' jurisdiction for identification. Results show that halving the length of civil proceedings, average firm size would increase by around...

The 2004 Presidential Election in Mozambique was marred by allegations of fraud. We assess the validity of these allegations by testing whether or not qualitative descriptions of the methods and locations of misconduct are consistent with a series of simple quantitative tests. Most studies of...

This paper studies the design of law-making and law enforcement institutions based on the premise that law is inherently incomplete. Under incomplete law, law enforcement by courts may suffer from deterrence failure, defined as the socialwelfare loss that results from the regime's inability to...

In a general equilibrium product-cycle model, lower trade barriers in-crease Southern purchasing power, which lifts long-run growth by increasing the profit from innovation. In the short run, factors of production must be reallocated inside firms, which lowers the opportunity cost of innovation,...

We investigate the impact of information about student satisfaction on university choice, using data from the UK’s National Student Survey (NSS) and on applications to undergraduate degree courses. We show that the NSS has a small, statistically significant effect on applications at the...

Allowing for a richer information structure than usual, we show that rational traders’ calculation with short-term price fluctuations may heavily influence their behaviour even if the interim price is not influenced by non-rational agents i.e. there is no noise trader risk. Instead, traders...

This paper re-examines Hayek’s insights into the problem of knowledge in markets, and argues that his analysis remains pertinent but has serious flaws. His central thesis—that the market price system is essential for communicating information and coordinating transactions wherever knowledge...

Uncertainty varies strongly over time, rising by 50% to 100% in recessions and by up to 200% after major economic and political shocks. This paper shows that higher uncertainty reduces the responsiveness of R&D to changes in business conditions - a “caution-effect” - making it more...

Market participants' risk attitudes, wealth and portfolio composition in°uence their positions in a pegged foreign currency and, therefore, may have important e®ects on the sustainability of currency pegs. We analyze such e®ects in a global game model of currency crises with continuous action...

This paper studies a dynamic model of crises with timing frictions that combines the main aspects of Morris and Shin (1998) and Frankel and Pauzner (2000). The usual arguments for existence and uniqueness of equilibrium cannot be applied. It is shown that the model has a unique equilibrium...