This note merges the fact that real activity is persistent with a Barro-Gordon type model of endogenous monetary policy. It shows that persistence crucially affects policy choices. This applies in noncooperative games with a finite horizon and in games with an infinite horizon. Always,...

This paper looks at whether public attitudes towards a single European currency held in the European Union member states reflect a rational evaluation of the involved benefits and costs. It finds that they do: the looser monetary and fiscal policy was in the past, and the more time a country...

Modern societies are characterized by competing organizations that rely predominantly on incentive schemes to align the behavior of their members with the organizations’ objectives. This study contributes to explaining why in so many cases incentive schemes have gradually crowded out...

Why is it that, in democracies, the poor do not expropriate the rich even though they outnumber them? In this paper we analyze the commonly held belief that the rich escape expropriation because they are economically powerful. We demonstrate that the economically powerful, i.e. the above-average...

This paper investigates the behavior of rent-seeking politicians in an environment of increasing economic integration. The focus of the paper is on the implications of globalization-induced political yardstick competition for constitutional design with a view to the current discussion in the...