This paper examines if taking into account changes in the number of producers, or equivalently changes in the product variety space over the business cycle, helps to understand and replicate international business cycle facts. To this end, we develop a two-country model in which the economy is...

Why do sudden and massive social, economic, and political changes occur when and where they do? Are there institutional preconditions that encourage such changes when present and discourage such changes when absent? In this paper, I employ a general model which suggests that massive equilibrium...

We consider boundedly rational agents who do not plan over the infinite future but make trading plans at a finite, arbitrary horizon. We investigate the role of that horizon in the price dynamics of an asset in a Lucas tree model. We then design a laboratory experiment to test our theoretical...

Monetary exchange is deemed essential when better incentive-compatible outcomes can be achieved with money than without it. We study essentiality both theoretically and experimentally, using finite-horizon monetary models that are naturally suited to the lab. We also follow the mechanism design...

Corporate and securities laws are seen to mitigate corporate fraud by 'manipulating the incentives of agents': presenting corporate agents with a probability of being caught and punished if they commit fraud. This article suggests that the same laws also affect corporate fraud in a significant...

In this paper we will give an overview of the more relevant results on the theoretical and experimental research related to public and private information dissemination and aggregation in asset markets, focusing mainly on the contemporaneous presence of public and private information and its...

Central banks have become increasingly communicative. An important reason is that democratic societies expect more transparency from public institutions. Central bankers, based on empirical research, also believe that sharing information has economic benefits. Communication is seen as a way to...

Central banks have become increasingly communicative. An important reason is that democratic societies expect more transparency from public institutions. Central bankers, based on empirical research, also believe that sharing information has economic benefits. Communication is seen as a way to...

This paper provides new evidence on the formation and anchoring process of expectations. We conduct a game experiment and measure the convergence of inflation expectations as well as the impact of credible targets in central banking. In addition, we evaluate the idiosyncratic variables of our...