This paper shows that the under-investment in firm financed training caused by hold up can justify the introduction of firing taxes in a laissez-faire economy with search frictions and risk neutral agents. More precisely we highlight two results. First, the introduction of a firing tax for newly...

It is well known that economies of scale that are external to the individual decision makers can lead to self-fulfilling prophecies and the multiplicity or even indeterminacy of equilibrium. We argue that the importance of this source of multiplicity and indeterminacy is overstated in...

The signs of forecast errors can be predicted using the difference between individuals' forecasts and the average of earlier forecasts of the same variable. It is possible to improve forecasts without worsening any. It is difficult to reconcile this result with the rational expectations...

International surveys of learning achievement and functional literacy are increasingly common. We consider two aspects of the robustness of their results. First, we compare results from four surveys: TIMSS, PISA, PIRLS and IALS. This contrasts with the standard approach which is to analyse a...

This paper addresses two aspects of the model of rational addiction: forward looking behavior and time consistent preferences. It explores smoking by women before, during and after pregnancy using the European Community Household Panel (ECHP). Pregnancy is used as an instrument for a partially...

This paper studies whether anomalies in consumption can be explained by a behavioral model in which agents make predictable errors in forecasting income. We use a micro-data set containing subjective expectations about future income. The paper shows that, the null hypothesis of rational...

Parents in the labor force have balance their work and home life, including the choice of the type of care to provide for their children while they work. In this paper we study the connection between the married women's labor force participation, child care arrangements and the time that...

Is it possible to increase growth and welfare by raising taxes and disposing of the tax revenues? We show this may indeed be the case in a simple model with endogenous technical change, represented by an increase in the variety of intermediate goods.

Is it possible to increase growth and welfare by raising taxes and disposing of the tax revenues? We show this may indeed be the case in a simple model with endogenous technical change, represented by an increase in the variety of intermediate goods.