Recent experimental studies find excessive truth-telling in sender–receiver games. We show that this phenomenon is robust to the random intervention of a truthful regulator. In addition, intervention significantly increases the excessive trust of receivers while the overall percentage of...

This paper studies optimal money growth in a cash-in-advance production economy with heterogeneity in patience levels and know-how. We show that the rate of deflation suggested by the Friedman rule is limited by the subjective discount rate of the most patient agent in the economy. The output...