I construct a model of a growing economy with pollution. The analysis of the model shows that the interactions between capital accumulation, endogenous longevity and environmental quality determine both the long-run growth rate of the economy and the pattern of convergence (i.e., monotonic or...

This paper reconsiders the long-run economic relationship between health care expenditure and income using a panel of 20 OECD countries observed over the period 1971-2004. In particular, the paper studies the non-stationarity and cointegration properties between health care spending and income....

The paper implements simultaneous random effect models as a means to analyse causality issues related to poverty and fertility in Ethiopia, a country which is plagued by high and persistent poverty and very high fertility rates in rural areas. Using longitudinal data from both urban and rural...

We focus on an “equilibrium analysis” of coordination problems in giving that lead to multiple equilibria; the notion of strategic complements and substitutes turns out to be useful in this regard. Some societies can get stuck at a low level of giving while others might, by accident or...

In standard political economy models, voters are ‘self-interested’ i.e. care only about ‘own’ utility. However, the emerging evidence indicates that voters often have ‘other-regarding preferences’ (ORP), i.e., in deciding among alternative policies voters care about their payoffs...

In this paper we estimate quadratic food Engel curves with measurement error using the 1994 Ethiopian Urban Household Budget Survey. In sharp contrast to the findings from developed countries, food share is found to increase with expenditure, and only starts to decline after some threshold level...

It is shown that, in a dynamic competition, an exogenous horizontal merger is profitable even if a small share of active firms merge. However, each firm has incentive to remain outside the merger because it would benefit more (Insiders’dilemma). We show that in an infinite repeated game in...

Political economy theories of financial development argue that in countries where a narrow elite controls political decisions, financial development may be obstructed to deny access to finance to potential competitors. We use panel data on developed and developing countries from 1975- 2000 to...

We introduce cheap talk in a dynamic investment model with information externalities. We first show how social learning adversely affects the credibility of cheap talk messages. Next, we show how an informational cascade makes truthtelling incentive compatible. A separating equilibrium only...

We consider non-cooperative environments in which two players have the power to commit but cannot sign binding agreements. We show that by committing to a set of actions rather than to a single action, players can implement a wide range of action profiles. We give a complete characterization of...