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Political Selection and Persistence of Bad Governments
Acemoglu, Daron - 2009
. Perfect democracy, where current members of the government do not have an incumbency advantage or special powers, always leads … to the emergence of the most competent government. However, any deviation from perfect democracy destroys this result … least competent government can persist forever in office. Moreover, a greater degree of democracy may lead to worse …
Persistent link: https://www.econbiz.de/10012463419
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Can Market and Voting Institutions Generate Optimal Intergenerational Risk Sharing?
Rangel, Antonio - 1999
theory, could be corrected by government intervention. However, as long as government policy is determined by voting …
Persistent link: https://www.econbiz.de/10012471858
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Meet the Oligarchs : Business Legitimacy, State Capacity and Taxation
Tella, Rafael Di - 2016
We study the impact of two dimensions of trust, namely trust in business elites and trust in government, on policy preferences. Using a randomized online survey, we find that our two treatments are effective in changing trust in Major Companies and in Courts/Government. In contrast to previous...
Persistent link: https://www.econbiz.de/10012455746
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Bailouts, Time Inconsistency, and Optimal Regulation
Chari, V.V. - 2013
We develop a model in which, in order to provide managerial incentives, it is optimal to have costly bankruptcy. If benevolent governments can commit to their policies, it is optimal not to interfere with private contracts. Such policies are time inconsistent in the sense that, without...
Persistent link: https://www.econbiz.de/10012459471
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Generational Risk - Is It a Big Deal? : Simulating an 80-Period OLG Model with Aggregate Shocks
Hasanhodzic, Jasmina - 2013
Previous solution methods could not handle large-scale OLG models such as ours due to the well-known curse of dimensionality. The prior state of the art uses sparse-grid methods to handle 10 to 30 periods depending on the model's realism. Other methods used to solve large-scale, multi- period...
Persistent link: https://www.econbiz.de/10012459483
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Macroprudential Regulation Versus Mopping Up After the Crash
Jeanne, Olivier - 2013
We study the interplay of optimal ex-ante (macroprudential) and ex-post (monetary or fiscal stimulus) measures to respond to systemic financial crises in a tractable model of fire sales. We find that it is generally optimal to use both, rejecting the Greenspan doctrine to only intervene ex post....
Persistent link: https://www.econbiz.de/10012459987
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Social Insurance : Connecting Theory to Data
Chetty, Raj - 2012
We survey the literature on social insurance, focusing on recent work that has connected theory to evidence to make …
Persistent link: https://www.econbiz.de/10012460227
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Optimal Interventions in Markets with Adverse Selection
Philippon, Thomas - 2010
We characterize cost-minimizing interventions to restore lending and investment when markets fail due to adverse selection. We solve a mechanism design problem where the strategic decision to participate in a government's program signals information that affects the financing terms of...
Persistent link: https://www.econbiz.de/10012462867
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Equity Depletion from Government-Guaranteed Debt
Hall, Robert E. - 2008
Government guarantees of private debt deplete equity. The depletion is greatest during periods when the probability of a guarantee payoff is highest. In a setting otherwise subject to Modigliani-Miller neutrality, firms issue guaranteed debt up to the limit the government permits. Declines in...
Persistent link: https://www.econbiz.de/10012464068
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Electoral Systems and Inequalities in Government Interventions
ⓡ, Garance Genicot - 2018
This paper studies the political determinants of inequality in government interventions under the majoritarian and proportional representation systems. Using a model of electoral competition with targetable government intervention and heterogeneous localities, we uncover a novel relative...
Persistent link: https://www.econbiz.de/10012480857