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Principal-agent models take outside options, determining participation and incentive constraints, as given. We construct a general equilibrium model where workers' reservation wages and the maximum punishment acceptable before workers quit are instead determined endogenously. We simultaneously...
Persistent link: https://www.econbiz.de/10014635663
lower. The model thus provides a rationale for real wage rigidity. The model also provides a theory of equilibrium …
Persistent link: https://www.econbiz.de/10012477757
"How does the lack of legitimacy of property rights affect the dynamics of the creation of the rule of law? We investigate the demand for the rule of law in post-Communist economies after privatization under the assumption that theft is possible, that those who have "stolen" assets cannot be...
Persistent link: https://www.econbiz.de/10010522421
In this paper, the choice between public and private provision of goods and services is considered. In practice, both modes of operation involve significant delegation of authority, and thus appear quite similar in some respects. The argument here is that the main difference between the two mod-...
Persistent link: https://www.econbiz.de/10012476874
This paper surveys recent developments in the theory of pareto efficient taxation. This literature attempts to …
Persistent link: https://www.econbiz.de/10012476881
In an earlier paper, we showed that the value of shadow prices depends on how the government contemplates re- equilibrating the economy to the perturbation associated with any project, except in the extreme case where the government has chosen all policy instruments optimally. Only under...
Persistent link: https://www.econbiz.de/10012476904
Much of the new theory of macro-economics that has been built upon micro-economic models of imperfect information leads …
Persistent link: https://www.econbiz.de/10012476909
This paper describes how imperfect information in both capital and labor markets can, in a context of maximizing firms and perfectly flexible prices and wages, give rise to cyclical variations in unemployment whose character closely resembles that of observed business cycles
Persistent link: https://www.econbiz.de/10012476976
essential to a theory of international lending is that of enforcement. The difficulty is one of ensuring that the two sides of a …
Persistent link: https://www.econbiz.de/10012477181
This paper outlines a general set of principles for tax avoidance. Most of at least the common tax avoidance schemes can be reinterpreted as making use of one or more of these principles. Four such methods are described. In a perfect capital market, these methods would enable the astute taxpayer...
Persistent link: https://www.econbiz.de/10012477208