People often form expectations about others using the lens of their own attitudes (the so-called consensus effect). We study the implications of this for trust and trustworthiness. Trustworthy individuals are more \optimistic" than opportunists and are accordingly less afraid to engage in...

Using data for advanced and emerging economies, we show that there is a negative correlation between public debt and corporate investment. Industry-level regressions show that high levels of government debt are particularly damaging for industries that need more external financial resources....

Agency theory assumes that tighter monitoring by the principal should motivate the agent to raise his effort level whereas the "crowding-out" literature suggests that it may reduce the overall work effort. These two assertions are not necessarily contradictory provided that the nature of the...

This paper explores the impact of high public debt on long-run economic growth. The analysis, based on a panel of advanced and emerging economies over almost four decades, takes into account a broad range of determinants of growth as well as various estimation issues including reverse causality...