Societies provide institutions that are costly to use, but able to enforce long-run relationships. We study the optimal decision problem of using self-governance for risk sharing or governance through enforcement provided by these institutions. Third-party enforcement is modelled as a costly...

This paper reviews the key economic issues concerning the welfare costs of inflation and deflation, with a view to shedding light on the desirable properties of the inflation process. Our review of the evidence on the overall costs of inflation and deflation indicates that such costs could be...

When people share risk in financial markets, intermediaries provide costly enforcement for most trades and, hence, are an integral part of financial marketsu0092 organization. We assess the degree of risk sharing that can be achieved through financial markets when enforcement is based on the...

We test the interest rate sensitivity of subprime credit card borrowers using a unique panel data set from a UK credit card company. What is novel about our contribution is that we were given details of a randomized interest rate experiment conducted by the lender between October 2006 and...

This Regional Strategy Paper (RSP), the second for Mercosur, provides a strategic framework for EC cooperation with Mercosur for the period 2007-2013. The RSP has been prepared following a consultation process involving Mercosur member states and civil society actors. EC-Mercosur relations are...

This paper offers an alternative explanation for the behavior of postwar US inflation by measuring a novel source of monetary policy time-inconsistency due to Cukierman (2002). In the presence of asymmetric preferences, the monetary authorities end up generating a systematic inflation bias...

Many people in Europe do not receive the social benefits to which they are entitled. This is the case across countries and for many types of benefits. Addressing this ‘non-take-up’ of benefits is critical for two key reasons: benefits do not fulfil their objective if they do not reach the...

The challenges arising from low employment rates, an ageing population, changing family structures and social exclusion have pushed ‘quality of life’ issues to the front of the EU social policy agenda. The Foundation has launched an initiative to improve the monitoring and reporting of living...