This paper formulates and analyzes a dynamic optimization problem of bond portfolios within the Markovian Heath-Jarrow-Morton term structure models. In particular we find the exact comdition under which the so-called barbell/bullet strategies become optimal relative to the forecasted term...

We construct a simple model of fiscal competition taking `rent-seeking' behavior of local governments into account and estimate a policy reaction function based on the model. We consider the scale of public input as each local government's policy tool. Local autonomies' method of seeking central...