The aim of this article is the development of models for converging economies. After discussing models of balanced growth, univariate models of the gap between per capital income in two economies are examined. The preferred models combine unobserved components with an error correction mechanism...

A time-varying quantile can be fitted to a sequence of observations by formulating a time series model for the corresponding population quantile and iteratively applying a suitably modified state space signal extraction algorithm. It is shown that such time-varying quantiles satisfy the defining...

This paper provides an empirical evaluation of the temporal efficiency of the US Acid Rain Program, which implemented a nationwide market for trading and banking sulphur dioxide (SO2) emission allowances. We first develop a model of efficient banking and select appropriate parameter values. Then...

We describe Amartya Sen's Capability Approach to welfare evaluation in the language of standard welfare economics, and assess to what extent it provides a genuine alternative for individual welfare measurement and policy evaluation. We review the nascent empirical literature on the capability...

This paper considers forecasts of the distribution of data whose distribution function is possibly time varying. The forecast is achieved via time varying combinations of experts’ forecasts. We derive theoretical worse case bounds for general algorithms based on multiplicative updates of the...

This paper considers a sequential screening problem. A seller sells an object to a buyer who is privately informed about the object's value. The value has two components. The buyer knows the first component when he contracts with the seller and learns the second component only later. The optimal...

I study the advantages of pollution permit markets over traditional standard regulations when the regulator has incomplete information on firms’ emissions and costs of production and abatement (e.g., air pollution in large cities). Because the regulator only observes each firm’s abatement...

This paper presents substantial new evidence on the competitive process that links together industrial economic and international economics. Our time-series data base concerns manufactured product prices and their domestic and international determinants. We identity cointegrating relationships,...