Institutions are important for proper economic performance, but are replaceable by trust or other social norms. We show that when proper institutions and trust are missing, integrity of the individuals can replace them. We construct a model of a transactions-based economy with contracts...

A common assumption in literature dealing with the lifecycle profile of human capital is that individuals decide every period on the investment in their human capital, i.e., schooling and training. However, in many cases training is a decision made by the employer rather than the employee. This...

This study analyzes the effects of government policies on the short-run and long-run movement of locally owned firms from a developed country to a less-developed country and on the output and growth rate of each country in the presence of home bias. The analysis uses a model which was developed...