This paper studies the impact of mortgages on consumer debt and on debt on durable goods. We first present a stylized model in which an outstanding debt, representing mortgages, affects positively consumer debt, and debt on durable goods. The model is empirically tested for the U.S. using PSID...

This paper develops a game where the government pursues an optimal monetary policy, monopolistic trade unions set nominal wages, and firms (domestic and multinationals) choose the levels of employment and output in the economy. Employment, output, and nominal wages are affected by the nominal...

This paper examines a model with habit formation in consumption. The model leads to higher equilibrium values in consumption, output, capital accumulation and labor supply than the neoclassical growth model with elastic labor supply. Comparative static analysis shows that an increase in the...

Ramsey's model is extended to three possible scenarios of conflicts in dual-population lands: partition, federation and civil war. The federally utility-maximizing consumption-growth rate in a strictly political federation might be lower than that under partition for the wealthier and more...

We analyse a dynamic model linking terrorist activities to popular support through a recruitment mechanism. It is shown that anti-terrorism policies focusing on liberal ideals (reducing repression, increasing economic opportunity) are effective at abating recruitment, thereby affecting the...

This paper develops a simple two-country model in which each economy consists of two sectors: a competitive non-tradable sector and an oligopolistic tradable sector. We investigate two related issues that arise in response to trade liberalization. First, we examine the linkage between trade...

The presence of indexed money modifies the demand for currency equation. An optimal demand for currency is derived from a transaction cost model, which includes indexed money. This money demand considers inflation an argument along with output and nominal interest rate. The estimation for the...