Uncertainty about the future preferences of the government may induce policy makers to run excessive budget deficits. As a solution to this problem, economists have proposed to impose a binding debt rule. In this paper we argue that a binding debt rule does not eliminate the distortions due to...

This discussion paper led to a publication in <A href="http://www.springerlink.com/content/n3w45lxj307m883m/">'Public Choice'</A> 109(3-4) 371-94.<P>In this paper we investigate experimentally the functioning of a wage tax financed unemployment benefit system on the development of the budget deficit, unemployment, and some other indicators of economic performance...</p></a>

This discussion paper resulted in a publication in <A HREF="http://link.springer.com/article/10.1007%2Fs10645-012-9188-7">'De Economist'</A>, 2012, 160(3), 219-236.</A> When debt levels approach critical levels, tax payers may revolt against the associated debtservice burden. Funding problems may arise in capital markets when lenders anticipate such revolts and refuse to...</a>

This paper assesses the role of sovereign risk in explaining macroeconomic fluctuations in Turkey. We estimate two versions of a simple New Keynesian small open economy model on quarterly data for the period 1994Q3-2008Q2: A basic version and a version augmented by a default premium on...

This discussion paper led to an article in 'Journal of Economic Theory' (2014). Volume 150, pp. 778-814.<P> We propose behavioral learning equilibria as a plausible explanation of coordination of individual expectations and aggregate phenomena such as excess volatility in stock prices and high...</p>

This paper provides empirical evidence that campaign contributions arestrongly associated with market expectations of future firm-specific political favors,including preferential access to external financing. Using a novel dataset, we find thatfirms in Brazil providing contributions in the 1998...

Goods are often allocated publically by means of queuing processes in developing countries.In such situations, which group of citizens should a corrupt government official favor? In addition,what should be the basis for this favoritism? To the best of our knowledge, these salient questionshave...

Power index research has been a very active field in the last decades. Will this continue or are all the important questions solved? We argue that there are still many opportunities to conduct useful research with and on power indices. Positive and normative questions keep calling for...