This paper analyzes the relationship among inflation, dollarization, financial intermediation, and real activity. Empirical evidence suggests non-linearity in the effects of inflation on financial intermediation and real activity, i.e., the existence of an inflation threshold. Evidence also...

One of the great successes of the law and economics movement has been the use of economic models to explain the structure and function of broad areas of law. The original contributions to this volume epitomize that tradition, offering state-of-the-art research on the many facets of economic...

We investigate the effect of the split-award tort reform, where the state takes a share of the plaintiff's punitive damage award, on the firm's level of care, the likelihood of trial, and the social costs of accidents. A decrease in the plaintiff's share of the punitive damage award reduces the...

This article presents a strategic model of liability and litigation under court errors. Our framework allows for endogenous choice of level of care and endogenous likelihood of filing and disputes. We derive sufficient conditions for a unique universally divine mixed-strategy perfect Bayesian...

Punitive damage awards have been widely criticized for generating a plaintiff’s windfall (i.e., a payment in excess of the costs of pursuing the punitive claim), which promotes unnecessary litigation, the escalation of liability insurance premiums and over-deterrence. In an attempt to...

Punitive damage awards have been widely criticized for their unpredictability (2004 Economic Report of the President) and for generating a plaintiff’s windfall (i.e., a payment in excess of the costs of pursuing the punitive claim), which promotes unnecessary litigation (Dodson, 2000),...

In an attempt to reduce the liability insurance costs of firms, several US states have implemented many different kinds of tort reform. Some reforms take the form of caps or limits on punitive damage awards while others have mandated that a proportion of the award be allocated to the plaintiff...