Mechanisms employing fines and rewards may be introduced in multi-equilibrium situations to enforce a certain equilibrium. The mechanism does two things. First, it produces a signal disrupting the normal dynamics of repeated play; potentially encouraging agents to reconsider their expectations....

Social norms and conventions have formally been defined as pertaining to static sets of situations. In this paper, we introduce a slight variation of Cristina Bicchieri's definition, where the set of situations is dynamically determined by previous actions. To suggest how the definition may be...

This paper discusses a number of questions with regard to Sweden's economic and political development:• How did Sweden become rich?• What explains Sweden's high level of income equality?• What were the causes of Sweden's problems from 1970 to 1995?• How is it possible that Sweden, since...

This paper asks whether the sensitivity of market long-term interest rates and credit ratings is associated with cross-country differences in informal institutions, measured by social trust. We note a number of theoretical mechanisms that could imply that similar objective problems are more...

As economists and policymakers strive to understand the causes of the global financial crisis, pinpointing the relationship between government size and economic growth is crucial.

Using data on institutional quality and the KOF Globalization Index, we examine over 100 countries from 1992 to 2010 to analyse the relationship between economic and social globalization and six measures of institutional quality, thereby testing Montesquieu's doux commerce thesis, that economic...

We show theoretically that the poor can benefit from price changes induced by higher income inequality. As the number of poor in a society increases, or when the income difference between rich and poor increases, the market for products aimed towards the poor grows and such products become more...

We use individual and multi-level data from Zambia on child nutritional health to test the absolute income hypothesis (AIH), the relative income hypothesis (RIH) and the income inequality hypothesis (IIH). The results confirm a non-linear positive relation between economic resources and health,...

This paper analyzes the relation between three dimensions of globalization (economic, social and political) and life expectancy using a panel of 92 countries over the period 1970-2005. Using different estimation techniques and sample groupings we find a very robust positive effect from economic...

Both institutional quality and institutional stability have been argued to stimulate economic growth. But to improve institutional quality, a country must endure a period of institutional change, which implies at least a little and possibly a lot of institutional instability. We investigate the...