The authors present a new solution to the time-consistency problem that appears capable of enforcing ex ante policy i n settings where other enforcement mechanisms do not work. The soluti on involves a social contract that specifies the optimal ex ante poli cy and is effectively sold by...

We investigate the effect of electoral rules and forms of government on fiscal policy outcomes in a large sample of democracies. We rely on different estimation methods to address prospective problems of statistical inference, due to nonrandom selection of these constitutional rules. The...

Is inequality harmful for growth? The authors suggest that it is. In a society where distributional conflict is important, political decisions produce economic policies that tax investment and growth-promoting activities in order to redistribute income. The paper formulates a theoretical model...

This paper analyzes the economic role and performance of a type of financial institution that is observed worldwide: rotating savings and credit associations. Using a model in which individuals save for an indivisible durable consumption good, the authors study rotating savings and credit...

This article exploits data on the pattern of violence across regions and over time to estimate the impact of the peace process in Northern Ireland on house prices. After establishing a negative correlation between killings and house prices, we estimate the parameters of a Markov switching model...

This paper argues that the possibility of bailouts to financial intermediaries distorts the supply price of capital and creates an argument for taxing financial bonuses separately from other sources of income. We develop a model of financial contracting where intermediaries compete for workers...