This paper's field evidence is: (1) in reality a major exchange rate change devastates an economy, i.e. the widespread academic faith that exchange rate changes are either beneficial or harmless is a false faith that contributes to needless world-wide economic havoc; (2) the 1982-85 exchange rate...

We present a decision theory appropriate for use in serious choices such as insurance. It extends standard decision theories like expected utility or cumulative prospect theory which are atemporal single stage theories. Instead it employs stages of knowledge ahead to track satisfactions and...

Robin Pope argues that Kotlikoff is right to favor shifting payroll taxes to sales taxes only Kotlikoff fails to mention all the benefits that would be obtained by the shift. One of these benefits would be aiding employment by shifting the burden of risk bearing from firms to governments that...

Economists invoke <link rid="b51">Mundell (1961</link>) in arguing for the general policy of a flexible exchange rate regime as a means of restoring equilibria after shocks. But there is a discrepancy between the intent of the general policy and attempts at its implementation as identified by specific changes in...

Divide the decision-maker's future into: (i) a pre-outcome period (lasting from the decision until the outcome of that decision is known), and (ii) a sequel post-outcome period (beginning when the outcome becomes known). Anticipated emotions in both periods may influence the decision, in...