International carbon markets are frequently propagated as an efficient instrument for reducing CO2 emissions. We argue that such markets, despite their desirable efficiency properties, might not be in the best interest of governments who are guided by strategic considerations in negotiations. We...

A fundamental cause of the global financial crisis was excessive creation of short-term money-like liabilities (quasi-money), notably in shadow banking holdings of sub-prime MBS and other US dollar structured credit instruments and in cross-border flow of capital to the uncompetitive Euro area...

A fundamental cause of the global financial crisis was excessive maturity mismatch, notably shadow banking holdings of sub-prime MBS and other structured credit instruments and cross-border Euro area interbank lending to the uncompetitive Euro area periphery. The costs of short term funding do...

While bringing positive impacts and benefits, cross-border infrastructure projects face additional challenges relative to national projects. Moreover, such projects involve a variety of technical, regulatory, institutional, and legal factors, and their obstacles constrain the development of...

Patent offices around the world face massive backlogs of applications, which threatens to slow down the pace of technological progress. However, economists lack analytical tools to tackle the issue. This paper provides a model of patent backlogs inspired by the literature on traffic congestion....

Natural disasters cause economic damages and may exacerbate disparities in income distribution among countries across the globe. This article employs satellite data on real-time active fire locations to evaluate the short-term impact of forest fires on economic inequality around the world. Using...

A capital market is a market for securities (debt or equity), where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year. The capital market includes the stock market (equity securities) and the bond...

While bringing positive impacts and benefits, cross-border infrastructure projects face additional challenges relative to national projects. Moreover, such projects involve a variety of technical, regulatory, institutional, and legal factors, and their obstacles constrain the development of...

This paper addresses the problem of hub airport privatization, similar to the studies by Matsumura and Matsushima (2012) and Mantin (2012). However, differentiating from their papers, this paper introduces a domestic airline network. That is, each country has one major hub airport and some local...

Does the sunk cost fallacy affect decision-makers in high-stakes situations? We develop a behavioral model of usage of a durable good with mental accounting for sunk costs. It predicts that usage increases in the sunk cost, and attenuates with time at a rate that increases in the sunk cost. The...