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The price of a safe asset reflects not only the expected discounted future cash flows but also future service flows, since retrading allows partial insurance of idiosyncratic risk in an incomplete markets setting. This lowers the issuers’ interest burden and allows the government to run a...
Persistent link: https://www.econbiz.de/10012797027
We consider a neoclassical economy where households derive utility from holding wealth. We show that, under some conditions, there can be rational bubbles. Hence, we provide a microfoundation for bubbles that relies on a frictionless infinite-horizon economy without any heterogeneity across...
Persistent link: https://www.econbiz.de/10011872947
Economic growth is propelled in part by the accumulation of different kinds of capital, including social capital in its several guises. This paper considers the interplay between financial crises and various aspects of social capital which, if it is allowed to depreciate, can undermine economic...
Persistent link: https://www.econbiz.de/10011288794
While trust and trustworthiness provide a fundamental foundation for human relationships, little is known about how … the World Values Survey to address a potential connection between trust and age. In this chapter, we will mainly focus on … trusting and trustworthy behavior elicited with the use of the seminal trust game (Berg et al., 1995) and with games …
Persistent link: https://www.econbiz.de/10011298524
We investigate whether there is a link between conditional cooperation and betrayal aversion. We use a public goods game to classify subjects by type of contribution preference and by belief about the contributions of others; and we measure betrayal aversion for different categories of subject....
Persistent link: https://www.econbiz.de/10011298544
high growth, but based on a simple stylized model of government behavior the expectation is that mainly high trust … countries provides support for this expectation. The difference in fiscal policies depending on government trust levels may help … explaining why better governed countries have been found to have less severe business cycles. It suggests that trust and …
Persistent link: https://www.econbiz.de/10009764994
In Switzerland, two key church institutions - the Conference of Swiss Bishops (CSB) and the Federation of Protestant Churches (FPC) - make public recommendations on how to vote for certain referenda. We leverage this unique situation to directly measure religious organizations ́power to shape...
Persistent link: https://www.econbiz.de/10010223454
We examine whether a corruption scandal in which the incumbent is implicated undermines trust in local government. We …, and data on the level of trust expressed in local politicians drawn from a new survey conducted in late 2009. We use … matching methods to improve the identification of the effect of corruption scandals on trust, comparing municipalities affected …
Persistent link: https://www.econbiz.de/10010375152
the lab - here the amount sent in a trust game (Berg, Dickaut, McCabe, 1995). As it turns out, the measures themselves are …. Moreover, with respect to behaviour in the trust game, we find a high re-test stability of transfers (p = .70). This further …
Persistent link: https://www.econbiz.de/10010250131
levels of trust and reduced social activity in post-reunification Germany. We also find substantial and long-lasting economic …
Persistent link: https://www.econbiz.de/10011521867