The Cobb-Douglas function is today one of the most widely-adopted assumptions in economic modeling, yet both its theoretical and empirical basis have long been under question. The purpose of this paper is to build an alternative production function on neoclassical microfoundations to address...

For the last quarter of a century, the Real Business Cycle model has dominated the interpretation of business cycles in mainstream economics; yet a number of significant empirical objections to it justify exploring an alternative approach. This paper proposes to base such an approach on a...

A popular interpretation of the Rational Expectations/Efficient Markets hypothesis states that, if it holds, market valuations must follow a random walk; hence, the hypothesis is frequently criticized on the basis of empirical evidence against such a prediction. Yet this reasoning incurs what we...

For the last quarter of a century or so, the Real Business Cycle (or quot;RBCquot;) model has stood as the dominant interpretation of the business cycle in mainstream economics, although throughout this long period a significant number of relevant empirical objections have been raised, both...

This paper develops a microeconomic model of the business cycle, based on the classical Lotka-Volterra predator-prey dynamic system, in which agency costs play the role of the predatory activity. The result is a system where quot;producersquot; (i.e., managers, workers and all those in direct,...

Corporate short-term thinking is not a new phenomenon related to the most recent corporate scandals - it has been conspicuously present for at least the last 30 years. This paper proposes to interpret it as a side effect of our increasingly competitive economic system. A competitive market tends...

How should monetary policy be optimally designed in an environment with high degrees of financial globalization? To answer this question we lay down an open economy model where net lending toward the rest of the world is constrained by a collateral constraint motivated by limited enforcement....

In this paper we make use of a unique dataset collected in the central train station of Kiel, Germany. A group ticket is used by individual proposers who search for co-travelers to share the ride with shortly before the train departure. The bargaining behavior resembles the Ultimatum game to the...

The aim of this paper is to investigate whether the probability of ceasing to export is lower for firms that simultaneously import intermediate inputs and export (vertically specialized firms à la Hummels et al., The Nature and Growth of Vertical Specialization in World Trade, 2001), once other...