Using a New-Keynesian framework, we investigate how far the inflationary processes in member states of EMU cause regional price levels to converge. We fail to produce hard evidence of the present existence of such an adjustment mechanism, notwithstanding that inflation in some countries tends to...

Some committees are made up of experts, persons interested in both the (subject) matter at hand and in coming across as able decision-makers. Such committees would like to conceal disagreement from the public. We present a theory that describes the reaction of experts to the requirement to...

Using a New-Keynesian framework, we investigate how far the inflationary processes in member states of EMU cause regional price levels to converge. We fail to produce hard evidence of the present existence of such an adjustment mechanism, notwithstanding that inflation in some countries tends to...

Some committees are made up of experts, persons interested in both the (subject) matter at hand and in coming across as able decision-makers. Such committees would like to conceal disagreement from the public. We present a theory that describes the reaction of experts to the requirement to...

In this paper it is argued that the slowness of the legislativesystem implies pre-commitment of legislation for at least the periodit takes to change a law. A simple model illustrates the benefit ofthis pre-commitment.

In this paper we argue that authorities aid cooperation by means of direct coordination or the enforcement of re-commitment devices such as contract laws.Credible threats of violence allow this role. In a local interaction model, an authority forms if mutually connected individuals with...

We present an equilibrium-search model with heterogenous workers who search for a job in one of two sectors and who lose part of their skills during unemployment. We show that an import tariff increase the wage and the employment prospects in the protected sector. This results in a labor market...

We apply the stochastic evolutionary approach of equilibrium selection to macroeconomic models in which a complementarity at the macro level is present. These models often exhibit multiple Pareto-ranked Nash equilibria, and the best response-correspondence of an individual increases with a...

In this paper it is argued that the slowness of the legislative system implies pre-commitment of legislation for at least the period it takes to change a law. A simple model illustrates the benefit of this pre-commitment.<BR><BR>

We extend the standard evolutionary model of Kandori, Mailath, and Rob (1993) to incorporate time-varying aggregate and idiosyncratic shocks separately in coordination games. We show that both types of shocks have a different effect on the invariant distribution over the different equilibria of...