the most suffered the biggest loss in confidence in institutions, particularly in trust in government and the financial …We document that trust in public institutions--and particularly trust in banks, business and government--has declined … over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in …

This paper identifies a class of multiperiod agency problems in which the optimal contract is tractable (attainable in … closed form). By modeling the noise before the action in each period, we force the contract to provide sufficient incentives … state-by-state, rather than merely on average. This tightly constrains the set of admissible contracts and allows for a …

Contracts in a dynamic model must address a number of issues absent from static frameworks. Shocks to firm value may … may not be felt until far in the future. We derive the optimal contract in a setting where the CEO can affect firm value … through both productive effort and costly manipulation, and may undo the contract by privately saving. The optimal contract …

The paper sees countertrade - the tying of trade flows - as an insurance contract that mitigates contractual hazards … investment. This way tying is seen as a commitment device against renegotiation during contract execution when investments are … developed countries to Eastern Europe (PCPEs) and LDCs. Based on a sample of 230 countertrade contracts signed between firms in …

We compare the characteristics of real world financial contracts to their counterparts in financial contracting theory …, by studying actual contracts between venture capitalists (VCs) and entrepreneurs. (1) The distinguishing characteristic … entrepreneur and the investor. The contracts seem most consistent with the theoretical work of Aghion and Bolton (1992) and …

We introduce tax contracts and examine how they affect government formation and welfare of voters in a democracy with … proportional elections. A tax contract specifies a range of tax rates a party is committed to if in government. We develop a new … introduction of tax contracts has two effects: a perks effect and a policy-shift effect. The former plays a central role in …