The economic effects from labor market integration are crucially affected by the extent to which countries are open to trade. In this paper we build a multi-country dynamic general equilibrium model with trade in goods and labor mobility across countries to study and quantify the economic...

In an earlier paper (Blinder and Morgan, 2005), we created an experimental apparatus in which Princeton University students acted as ersatz central bankers, making monetary policy decisions both as individuals and in groups. In this study, we manipulate the size and leadership structure of...

Different beliefs about how fair social competition is and what determines income inequality, influence the redistributive policy chosen democratically in a society. But the composition of income in the first place depends on equilibrium tax policies. If a society believes that individual effort...

We construct a simple model where political elites may block technological and institutional development, because of a 'political replacement effect'. Innovations often erode elites' incumbency advantage, increasing the likelihood that they will be replaced. Fearing replacement, political elites...

European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that redistribution is a function of the variance and skewness of the pre-tax income distribution, the volatility of income (perhaps because of trade shocks), the social costs of...

Two laboratory experiments - one a statistical urn problem, the other a monetary policy experiment - were run to test the commonly-believed hypothesis that groups make decisions more slowly than individuals do. Surprisingly, this turns out not to be true there is no significant difference in...

From 2000 to 2003, when Ben Bernanke was a professor and then a Fed Governor, he wrote extensively about monetary policy at the zero bound on interest rates. He advocated aggressive stimulus policies, such as a money-financed tax cut and an inflation target of 3-4%. Yet, since U.S. interest...

This paper formalizes the principle that persecution power of government may generate violent contests over it. We show that this principle yields a large set of theoretical insights on different separation-of-powers institutions that can help to preempt such contests under different...

Despite a large consensus among economists on the strong interdependence and synergy between pro-development institutions, how should one understand why Imperial China, with weaker rule of law and property rights, gave the commoners more opportunities to access elite status than Premodern...

This paper demonstrates that failures in monetary policy arise not just from dynamic inconsistency, but more importantly, from imperfect understanding of the economy and the effects of policy. Using recent and historic episodes from the United States and abroad, we show that limited knowledge on...