To examine the impact of globalization on managerial remuneration, we consider a matching model where firms compete both in the product market and in the managerial market. We show that globalization, i.e., the simultaneous integration of product markets and managerial pools, leads to an...

We propose a blueprint for an international emission permit market such as the EU trading scheme. Each country decides on the amount of permits it wants to offer. A fraction of these permits is freely allocated, the remainder is auctioned. Revenues from the auction are collected in a global fund...

In this paper, we provide an economy-wide perspective on equity and debt across banks and industrial firms when both are faced with incentive problems and equity is scarce. Increasing bank equity may mitigate the bank-level moral hazard but exacerbates the firm-level moral hazard due to the...

In this paper we examine the impact of tax contracts as a novel institution on elections, policies, and welfare. We consider a political game in which three parties compete to form the government and voters may behave strategically. Parties have policy preferences about the level of public-good...