We explore how outcomes of trade policy retaliation (Nash tariff games) are affected when trade simultaneously takes places geographically across countries and through time via financial intermediation. In such models deficits and surpluses in goods trade are endogenously determined, and...

In monetary models in which agents are subject to trading shocks there is typically an ex-post inefficiency in that some agents are holding idle balances while others are cash constrained. This inefficiency creates a role for financial intermediaries, such as banks, who accept nominal deposits...

We present an experimental study on how people take risk on behalf of others. We use three different elicitation methods, and study how each subject makes decisions both on behalf of own money and on behalf of another individual’s money. We find a weak tendency of lower risk-taking with...

The paper analyses theoretically what role fiscal councils could play and surveys empirically the activities of existing councils. Case studies of the Swedish Fiscal Policy Council and the UK Office for Budget Responsibility are done. It is concluded that fiscal councils should be advisory,...

Proprietary rule, whereby the state is owned by a ruler who maximizes tax revenues minus the costs of governing, is a useful ideal type that describes many of the states that have ever existed. The study of proprietary rule and its public finance, however, is comparatively scarce. I argue that...

This paper studies the impact of recent changes in second pension pillars of three Central and Eastern European Countries. The paper seeks to answer the following questions: i) what is the impact on the sustainability of Poland's pension system of the decrease in the pension contribution going...

The Swedish Fiscal Policy Council (FPC) set up in 2007 is one example of the recent international trend to create independent fiscal watchdogs. The FPC has established itself as an important participant in the Swedish economic policy discussion. The FPC has small resources and a broad remit...

This paper analyzes the impact of aging on capital accumulation and welfare in a country with a sizable unfunded social security system. Using a two-period overlapping generation model with potentially endogenous retirement decisions, the paper shows that the type of aging, i.e. declining...

We develop a simple model of the exchange rate in which agents optimize their portfolio and use different forecasting rules. They check the profitability of these rules ex post and select the more profitable one. This model produces two kinds of equilibria, a fundamental and a bubble one. In a...

We study the consequences of franchise extension and ballot reform for the size of government in Western Europe between 1820 and 1913. We find that franchise extension exhibits a U-shaped association with revenue per capita and a positive association with spending per capita. Instrumental...