This paper shows that whether or not a sovereign can borrow to smooth consump- tion depends both on how consumption smoothing is achieved, whether by contingent debt issuance or by contingent debt servicing, and on the penalty for debt repudiation. If a sovereign that repudiated its debt could...

This paper offers an explanation for observed differences across countries in educational policies and in resulting interpersonal distributions of human capital. We analyse a general-equilibrium model in which, as a result of the apportionment of natural ability, nurturing, and publicly financed...

This paper addresses the following question: Does characterizing the state to be an agent of its subjects provide a useful "as if" framework for positive analysis of economic policy? Or, can we understand economic policy only by explicitly characterizing the state as proprietary, the instrument...